The full effects of an indexation freeze on federal grants for councils will not be felt until later this year.
Figures obtained by the federal Labor Party show Hume and Whittlesea councils will each lose more than $5 million in the next four years.
The State and Territory Local Government Grants Commission figures paint a bleak picture for councils across the nation that rely on Federal Assistance Grants to spend on projects.
Last year’s federal budget contained an indexation pause on the grants scheme to save $950 million in projected expenditure through to 2017-18. The move has forced councils to rein in spending on roads and big projects.
Federal McEwen MP Rob Mitchell said the indexation freeze meant less money for roads, libraries, parks and services.
“The flow-on from these cuts will hamper the ability of our local councils to service our communities and develop and maintain pivotal critical infrastructure.
”Hume and Whittlesea councils are now faced with the unenviable choice of either making rates and charges unaffordable for families or cutting essential services.”
Whittlesea finance and organisation improvement director Rod Wilkinson said the council was unable to verify the figures that would apply, but any cuts would be dealt with internally.
“Any shortfall in money that is incurred by the City of Whittlesea will be absorbed internally by reducing operational costs,” he said.
Daryl Whitfort, Hume director of city, governance and information, said the council’s projected loss of $5.2 million, as revealed in the figures obtained by Labor, looked reasonable despite not knowing the level of indexation and growth rate assumed to reach the figure.
He said additional Roads to Recovery funding of $980,000 for the 2015-16 year would compensate in the short term for the loss of funds.
Any other implications would be considered as part of the 2015-16 budget.
Deputy Prime Minister Warren Truss said that while the government had temporarily paused indexation of the Federal Assistance Grants program for three years, it would still provide $9.3 billion to local government to deliver services and build community infrastructure.
