Unfreeze the Federal Assistance Grants to our local governments and return $18M to Tasmania

Independent Tasmanian Senator Jacqui Lambie in a speech to the Senate last night, called on the Turnbull-Morrison Government to unfreeze the Federal Assistance Grants to our local governments after a Parliamentary Library study uncovered that Tasmanian local government, over the forward estimates would lose $18 million.

Read full speech here.

Read full Parliamentary Library brief here.

Senator Lambie told the Parliament:

“Mr President,

I’ve received warnings from members of Tasmanian local government about the significant reduction in services to their rate-payers brought about by the reduction in Federal Assistance Grants. The correspondence I received in part reads:

Federal Assistance Grants to Local Government have been frozen for period of three years, placing financial pressure on councils and their rate-payers in regards to having to either reduce services and/or increase rates to cover. Local government has lost millions due to this freeze.

Frozen Grants

Mr President,

I commissioned a Parliamentary library research on the issue to verify the facts on the freezing of federal funds to local government. The report says:

When did grants to local governments first begin? The first series of grants to local government bodies occurred for the 1974-75 year and were provided for by the Local Government Grants Act 1974.

In 1991-92, the Commonwealth began to provide additional amounts to the local government bodies with respect to local roads.  Grants to local government are now provided for by the Local Government (Financial Assistance) Act 1995.

When were they frozen and who was responsible? The freeze to the indexation of FAGs was announced by the current Government in the 2014-15 Budget. The Government will achieve savings of $925.2 million over four years by pausing indexation of the Local Government Financial Assistance Grants Programme for three years commencing 1 July 2014. The savings from this measure will be redirected by the Government to repair the Budget and fund policy priorities.

How much money has been lost to local government?

Facts and Figures

Mr President,

The Parliamentary Library supplied me with a chart, which details the amount of money per year lost to each state by the freezing of FAGS, Federal Assistance Grants. I’ll attach the chart to my social media and website for all to see, however I’ll detail Tasmania’s losses:

In total over the 4 year forward estimates Tasmania will lose over $18 million in Federal assistance grants: $1.9 million for 2014-15; $3.9 million for 2015-16; $5.9 million for 2016-17 and $6.1 million for 2017-18.

Mr President,

These figures are a disgrace for the Liberal members of this Parliament from Tasmania – indeed they are a disgrace for all the Liberal and National members of this parliament from every Australian state.

Time to step up

You are in government. You should have the influence and courage to change this rotting leftover policy from Tony Abbot’s horror budget of 2014-15. It must be changed - or else all National and Liberal members of this Parliament will be directly responsible for the rate rises forced on local government by the Turnbull -Morrison reduction is local government assistance grants.

In fact I invite Tasmanian rate-payers to send copies of their rate rises to their local Federal Liberal members of Parliament – and demand an explanation. This matter is once again another example of the Tasmanian liberals not standing up for their state – and putting a political party before the people they represent.

In summary – Parliamentary Library research shows that over the forward estimates almost one billion dollars is lost to all Australian local government authorities. This is at a time when the government over the forward estimates will borrow $16 billion in order to give it away in poorly targeted and managed foreign aid.

And I call on this Turnbull-Morrison Government to unfreeze the Federal Assistance Grants to our local governments.