Blacktown battles $30 m funding loss

Blacktown battles $30 m funding loss

Published on 10 May 2019

Blacktown City Council estimates it will be more than $30 million worse off in the coming financial year due to increased ‘cost shifting’ by the state and federal governments.

Cost shifting occurs when state and federal governments force councils to assume responsibility for infrastructure, services and regulatory functions without providing sufficient supporting funding.

Blacktown City Mayor Stephen Bali MP said Blacktown City Council misses out on around $10 million in Federal Government funding and faced $20 million in additional costs for facilities and services previously funded by the NSW Government.

“The Federal Government stopped indexing its annual funding grants for councils across Australia in the infamous 2014 budget. They have since changed the way the grants are distributed and caused a significant loss of real funding for Council,” Mayor Bali said.

“This funding is meant to assist areas such as Blacktown City that are directly affected by government policy (such as refugee settlement) and provide support funding for infrastructure to cater for rapid population growth.

“The Federal and NSW coalition governments have tasked Blacktown City Council to support approximately 20 per cent of the anticipated population growth in Greater Western Sydney but these governments:

kept Blacktown out of the Western Sydney City deal, thus denying it “liveability” funds cut federal grants cost shifted onto the Council added to commuter costs via tolls to motorways but sought “value capture” to help fund new rail lines.

“The battle to balance the budget has been made harder every year by the NSW Government moving the cost of facilities and services onto local councils,” Mayor Bali said.

Services previously funded or partially funded by the NSW Government are now passed on to Council resulting in revenue shortfalls, including:

NSW Government waste levy - $7.9 million Service facilities such as libraries - $4.04 million Administration of the Companion Animals Act (controlling domestic animals) - $1.6 million Contribution to NSW Fire Brigade - $2.1 million.

“It’s an absolute disgrace and I call on Blacktown residents to join with me to tell the next Federal Government and the re-elected NSW coalition government that enough is enough!”

“We estimate that, as a result of all this, we are $30 million worse off this year alone,” Mayor Bali said.

Technical information about FAGs Blacktown City has had successive reductions in our annual Commonwealth Financial Assistance Grant (FAG) allocation. Our annual FAG entitlement reached a peak level of $19.4 million in 2012/13, and in the subsequent years our annual allocation has progressively reduced.

We project that in 2019/20 our allocation will be $15.7 million. Had our annual allocation continued to increase from 2012/13 onward for 2019/20 it would have been around $25.5 million, almost $10 million higher than what we will actually receive.

As an indicator of the impact of this reduction it is equivalent to the combined total cost for 2019/20 of our aquatic and leisure centres, Blacktown International Sportspark and urban animal management services. Conversely, it is comparable to the employment costs of approximately 110 staff.

A key element of the Commonwealth Financial Assistant Grant funding is that this revenue is untied, meaning it can be allocated to those services as Council so determines. As we anticipate this revenue will continue to decline in future years, we will need to further review both the breadth and variety of services of which we provide.