Bendigo council boss supports proposal to fast-track grants but says indexation freeze must be reversed

Opposition leader Bill Shorten this week proposed fast-tracking Financial Assistance Grants funding from 2018-19 into next financial year, a move he said would stimulate local council economies.

“These communities need jobs and they need them now,” he told Fairfax Media.

“This will provide local economies with a shot in the arm, which will mean more local jobs and more investment.”

Local government budgets have taken a hit since the rate of indexation on grants was frozen as part of the federal government’s unpopular 2014 budget. 

City of Greater Bendigo chief executive officer Craig Niemann said the early cash injection would be welcomed.  

“The city appreciates the Financial Assistance Grant funding received from the Federal Government, which helps to deliver important services to the community,” Mr Niemann said. 

But he believed reversing the decision to freeze grant indexation would be even more beneficial to his municipality.  

“The freeze has put additional financial pressure on local government because the Financial Assistance Grant funding has failed to keep pace with inflation.”

Last year the City of Greater Bendigo received $15.2 million in federal financial assistance grants.

But its finance manager, Travis Harling, said last month the 2014 indexation freeze could mean “one or two” capital projects do not get done each year. 

“A footpath doesn’t get fixed or a drain doesn’t get renewed for 12 months because it gets put back in the program,” he said.

Fairfax Media is reporting the freeze could be lifted in treasurer Scott Morrison’s 2017-18 budget next month. 

The Labor party promised to repeal the decision this year if elected at the last election.