The LGAQ this year commissioned Morton Consulting to prepare an analysis of Financial Assistance Grants (FA Grants) funding shares by Australian Council of Local Government categories.
Together with the Federal Principles and State Methodology, this new comparative analysis will assist you to understand how FA Grants are distributed and how your allocation compares to other like councils.
Why are FA Grants important?
Australia’s Federal fiscal arrangements see local government collect about 3 per cent of all public sector revenue.
Financial Assistance Grants represent the only legislated, allocative fiscal equalisation transfers to local government with the program consisting of two components:
- a general purpose component which is distributed between the states and territories according to population (i.e. on a per capita basis), and
- an identified local road component which is distributed between the states and territories according to fixed historical shares.
Both components of the grant are untied in the hands of local government, allowing councils to spend the grants according to local priorities.
Federal Principles
The distribution of the funding under the FA Grants program is recommended in each state and the Northern Territory by a local government grants commission in accordance with the:
State methodology
The Queensland Local Government Grants Commission has published a methodology paper on National Principles-based method applied in Queensland
Want to know more?
If you would like to discuss any matters relating to this circular, please contact Roland McMillan, Principal Advisor - Economics and Finance 1300 542 700.