Councils call for an end to broken, outdated funding model

Published on 12 February 2025

Queensland councils have called on all Federal candidates not to leave Queensland communities back in the 1970s with a broken funding model.

In an open letter published today, the Local Government Association of Queensland (LGAQ) says the Financial Assistance Grants regime, which was introduced in the 1970s, is broken and needs urgent repair to guarantee grassroots liveability and fair funding for councils in the face of the cost-of-living crisis.

The LGAQ has released a suite of measures that will deliver real, on the ground support for communities and their residents that would deliver a $73.8 billion dividend to the Queensland economy and more than 105,000 jobs.

Along with a fairer funding model, councils are calling for improved insurance and disaster management to protect communities, including an expansion of the voluntary home buy back scheme, measures to make insurance more available and affordable and funding to build back better after natural disasters.

The LGAQ has also put forward measures to empower First Nations communities, support transitioning communities, delete the digital divide and protect the environment.

“As Queenslanders prepare to cast their vote in the 2025 Federal Election, they do so at a time of transition and growth for communities across Queensland,” LGAQ Chief Executive Officer Alison Smith said.

“Councils make our communities liveable – and Queensland councils are doing more for their communities than ever before. 

“Yet the Federal funding model supporting councils and their communities – introduced in the mid-1970s – is going backwards with untied funding for local governments continuing to fall as a percentage of Commonwealth tax revenue.

“Without further Federal support, councils have limited options available to them to fill the gap – increasing rates or cutting services.

“This is simply not acceptable in a cost-of-living crisis.

“No other level of government is so close to the community: Queensland councils maintain community infrastructure worth $150 billion, 153,000km of local roads, 53,000 hectares of parks and playgrounds, 2,800 bridges, and $25 billion in water and wastewater assets including 314 water treatment plants and 76,000km of water and sewer mains.

“And they do it with just 3 cents in every $1 of taxation.

“Communities cannot afford councils to continue to be stretched to provide so much with so little.”

Properly funding councils was great value for the community and the economy, Ms Smith said.

“According to research commissioned by the Australian Local Government Association (ALGA), a $1.7 billion dollar investment per year would generate an additional $7 billion in economic activity each year, delivering vital jobs, projects and generational infrastructure for Australians,” Ms Smith said.
 
The LGAQ is asking all candidates in the 2025 Federal Election to put local communities first and enhance community liveability by committing to measures including:

• Increasing untied funding to all councils to at least 1 per cent of Commonwealth taxation revenue, indexed annually and with payment timing certainty;
•  Establishing a new allocative, permanent funding program to build and maintain essential community infrastructure;
• Implementing a new tripartite agreement between all three levels of government that ends the cost shifting onto local governments;
• Reviewing opportunities to utilise existing heads of power to increase direct funding to councils;
• Supporting councils stepping in to provide childcare due to market failure through a dedicated, sustainable and allocative funding program;
• Reinstating the 80:20 infrastructure funding split, allowing councils to submit directly to Infrastructure Australia and implementing the remainder of the LGAQ recommendations to the Federal Inquiry into the Sustainability of the Local Government Sector;
• Addressing overcrowding and support economic development in remote and discrete communities with a new bilateral First Nations housing funding agreement with the Queensland Government;
• Increasing the affordability and availability of insurance statewide – including for households, strata title holders and businesses;
• Supporting communities impacted by the energy transition, through locally led solutions, direct funding and a local government voice on the Net Zero Economy Authority board;
• Extending funding for an ongoing, voluntary home buy-back program;
• Deleting the digital divide by prioritising investment into regional, rural and remote areas that are currently underserved by telecommunications providers; and
• Partnering with Queensland’s Reef councils to deliver the Reef Councils’ Rescue Plan’s five key initiatives: Climate Resilience and Risk, Cleaner Wastewater, Cleaner Stormwater, Cleaner Road Runoff and Healthy and Resilient Landscapes.

The LGAQ will be sharing these priorities with voters via our campaign website www.dontleaveusinthe70s.com.au.

The full Federal Election platform can be found here. 

Click here for video grabs from LGAQ CEO Alison Smith.

For more information, please contact:
Dan Knowles, Media Advisor
Phone: 0432 681 664