New South Wales Local Government Grants Commission will not move forward with proposed changes to the Financial Assistance Grant methodology.
Key points:
- Wollongong City Council welcomed the decision the NSW Local Government Grants Commission will not move forward with proposed changes to the Financial Assistance grant methodology.
- Council had opposed the proposal that would have seen approximately $16 million per annum cut from its budget in the next financial year.
- Council will continue to advocate for an increase to the Financial Assistance Grants.
Wollongong City Council has welcomed news the New South Wales Local Government Grants Commission will not move forward with proposed changes to the Financial Assistance Grant methodology.
The independent Grants Commission annually distributes Federal Government funding for local councils through the Commonwealth Financial Assistance Grant program, which provides untied funding for councils to allocate to local priorities. In the 2025-2026 financial year, Council received $23.8 million funding.
Under the proposal, it was anticipated that Wollongong City Council would have had approximately $16 million per annum cut from its budget from next financial year.
“I’m so very pleased that the Commission has heard feedback from councils like Wollongong who spoke loudly and clearly about our concerns about these proposed changes,” Lord Mayor of Wollongong Councillor Tania Brown said.
“We said all along that we supported a review of the methodology for the allocation of funding, but any changes should not impact a Council and community so profoundly.
“The $16 million reduction to Council’s budget would have posed an ongoing risk to this organisation’s financial sustainability, our service delivery and our capacity to renew key infrastructure like roads, buildings and public pools that our community need.”
Cr Brown said she believed the strong advocacy from Wollongong City Council demonstrated to the Commission the level of concern within local government and the community about this proposed change.
“Only recently I spoke with the Premier Chris Minns about this proposal and expressed my very serious concerns about what it would mean for the residents of Wollongong, and I know our local MPs have been very vocal as well,” Cr Brown said.
“We have said all along that we supported more equitable distribution of funding to local government, but it should bolster all councils.”
In a statement to Council the Local Government Grants Commission said they received 102 submissions from NSW Councils about the draft model. Their statement said that of these submissions 10 clearly supported the draft model, 54 raised significant concerns or proposed modifications, and 38 opposed the changes.
“These numbers speak for themselves. There was a very short consultation window for this proposed methodology review and, of the 128 local governments in NSW, they received responses from 102 of them,” Cr Brown said.
“Further, 72 per cent of the Councils were against or concerned about the draft model. That’s resounding feedback in my book.”
Cr Brown said while this was a positive step, Council would also continue to advocate for an increase to the level of financial assistance to local government.
“Local Government do so much for their community every single day and the Financial Assistance Grants are an invaluable way for us to deliver more for our residents and are an additional funding stream away from rates,” Cr Brown said.
“We’re going to continue to advocate, as we resolved at our Extraordinary Meeting of Council last Thursday, for the Financial Assistance Grants to be returned to 1 per cent of Commonwealth taxation revenue.”
