With the federal election fast approaching, Murray River Council is urging major parties to commit to restoring the Federal Assistance Grants to one per cent of federal taxation revenue.

Local governments around the state have cited the declining revenue as a contributing factor to the financial sustainability challenges that NSW councils are facing.

Mayor John Harvie said the financial sustainability of local governments should be a priority for the major parties.

“Local government financial sustainability is by far the single most important issue facing every council in Australia,” he said.

“Councils no longer have sufficient funding to cover maintenance or to upgrade or replace critical infrastructure, and have also had to cut back on much-needed services.”

Local governments were initially receiving one per cent of the tax revenue but over the past 20 years, the funding has been halved.

That 50 per cent is worth around $3 billion, with Murray River Council’s share adding up to $10 million every year.

According to Cr Harvie, the government expects ratepayers to cover the difference by introducing a Special Rate Variation, which would see rates rise by 70 per cent over four years to cover the shortfall.

Cr Harvie said the federal government must take action before the situation worsened.

“MRC will not be passing this on to our ratepayers,” he said.

“The federal government is responsible, and they must reinstate the (grant) to one per cent of federal taxation revenue now or preside over the greatest decline in infrastructure and service standards in Australian history.

“The prime minister and the opposition leader could make a policy announcement on this today, instead of giving away billions of dollars in subsidies, in the hope of retaining or winning government.”

According to the Country Mayors Association of NSW, a report from the Auditor-General revealed that 16 councils had insufficient cash to meet three months of expenses.

The report also noted that 40 per cent of councils did not meet operating performance benchmarks, while 35 councils met none or just one of the three key financial sustainability benchmarks.

Before the election was announced, the CMA had written to Prime Minister Anthony Albanese, opposition leader Peter Dutton and Nationals leader David Littleproud, requesting to discuss the issue.

NSW Country Mayors Association chairman Rick Firman said there had been no response.

“Despite ongoing calls from all local government peak bodies and from individual councils ... not a single party has addressed the issue,” he said.

“Local government expects that the unique role that councils perform in delivering on-ground services to the people living in every corner of Australia will be recognised and funded appropriately by the Commonwealth.

“The federal election provides a platform for all parties and the independents to make that commitment.”

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Tuesday, 1st July 2025

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