New research highlights billion-dollar local road funding shortfall

A new independent research report has recommended that Australian councils are provided with an extra $1 billion in federal funding to maintain and upgrade their local roads. 

With the Baw Baw Shire covering more than 4,000 square kilometres and with population growth expected to increase by 44.6 per cent by 2041, Mayor Cr Annemarie McCabe said that Council echoes the sentiment in the report.  

As part of its own advocacy campaign, Advancing Baw Baw, Council has been calling for better support and funding to fix local road issues, with growing localities such as Warragul and Drouin unable to cope with the current congestion and growth.  

The Grattan Institute’s Potholes and pitfalls: how to fix local roads report recommends that the Government increase untied federal funding to councils through Financial Assistance Grants by $600 million per year, and Roads to Recovery funding by $400 million per year. 

The report also highlights that many regional, rural and remote councils face additional challenges in maintaining their local roads, based on their large geographic size and relatively small ratepayer base. 

Cr McCabe stated that the decrease in federal funding over time has contributed to the erosion of the roads in Baw Baw.  

“Baw Baw Shire Council supports the recommendations of the Grattan Institute to increase federal financial assistance to local government by $1 billion and target road funding to where it’s needed most,” Cr McCabe said.     “Many Councils do not have a realistic way of getting the funding and money they need to keep their roads in good condition, especially rural and remote councils.  

“The recommended increases in funding would provide an extra 25 per cent on top of what Councils are currently spending on road maintenance.” 

Cr McCabe added that Baw Baw Shire Council’s challenges are compounded by the vastness and diversity of the local landscape.  

“Our Shire covers 48.9 per cent more land area than the next largest Victorian peri-urban council,” she said.  

One of the key issues identified in the Grattan Institute’s report is that federal funding to councils is not keeping up with increases in road construction and maintenance costs. 

“In 2022/23, Council completed 238,000 square metres in road resealing projects and in the same year, our capital expenditure on roads was nearly $6 million,” the Mayor said.  

“Despite this, so many of our roads still need further work, and we’re aware of the frustrations experienced by our residents when it comes to this.  

“We are calling and urging for more funding and support to improve our roads and ensure a safer driving experience for everyone.” 

The Grattan Institute has also recommended that the Federal Government establish a new $200 million per year fund to assess and upgrade local roads identified as priority freight routes.