Staunch campaigning over several years is finally paying dividends, with a pathway for local government sustainability finally being forged.

Federal Labor has committed to a Local Government Federation Compact, vowing to look at increased ongoing regular funding for the sector to be used on roads, infrastructure and community services.

District mayors say it could save councils from the succumbing to the escalating financial crisis.

For many, the need to consider rate increases above CPI and state imposed caps was edging closer.

The Compact, announced at the ALP National Conference on Saturday, commits to annually increase the level of Financial Assistance Grants to councils across Australia.

It will also broaden the scope of Roads to Recovery funding to be used to purchase plant and equipment to enable councils to carry out their own road maintenance with their own trained workers.

Other inclusions in the five year Compact include:

Financial Assistance Grants currently sit at 0.49 per cent of taxation revenue, but councils have been campaigning to have it increased after it dropped from one per cent in 1996.

Until now, those calls have fallen on deaf ears.

While there’s no discussion yet on what the increase offer will be next year and beyond, local mayors said the promise to address the shortfall is an important first step.

If financial assistance grants returned to one per cent of taxation revenue, MRC’s allocation could increase to more than $20 million and ERC’s to more than $14 million.

Edward River Mayor Ashley Hall said the Compact recognises the growing financial pressures facing regional councils, and the important role local government plays in supporting communities.

“Financial Assistance Grants are vital because they give councils the flexibility to invest where our communities need it most, whether that's maintaining roads, supporting local facilities or delivering essential services.

"My hope is that we see meaningful increases in the short term and a return to a more sustainable level of funding over the next five years.

Murray River Mayor John Harvie also welcome the Compact, but said he was “cautiously optimistic”.

“This is fantastic news for councils right across Australia, particularly those in rural and regional areas like Murray River, which continue to deliver essential services across large geographic areas with limited funding.”

"For Murray River Council, every additional dollar helps us maintain roads and community infrastructure, while continuing to provide the services our residents rely on every day."

"We've advocated ferociously, over the last two years, for fairer funding for local government, so we welcome this announcement.

“We now hope it delivers on its promise and provides councils with the certainty and long-term investment needed to meet the growing expectations of our communities."

Local government associations will now work with the Federal Government and unions representing the local government workforce to develop and implement the Compact.

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Sunday, 20th August 2028

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