Council is raising the alarm over a proposed change to the methodology used to distribute Commonwealth Financial Assistance Grants (FA Grants) in New South Wales which would see a substantial reduction in federal funding to the Shoalhaven.
The Office of Local Government has informed Council that under the proposed changes, Council’s 2025-26 allocation would have decreased from $16.2 million to $14 million, which includes a $1.6 million reduction in the Local Road Component of the fund.
The proposal has been developed by the NSW Local Government Grants Commission in response to calls from the sector for greater financial equity and support for regional areas.
The draft comes at a time when Shoalhaven has been united with councils across Australia in advocating for an increase in federal financial support to address growing infrastructure backlogs, rising service demands and the ongoing impact of cost shifting from state to local government.
“This proposed change to the funding allocation is a slap in the face to the Shoalhaven community. At a time when we’re already under significant financial pressure and working hard to make every dollar count, taking millions of dollars away from our region is the exact opposite of what’s needed,” said Acting Mayor Peter Wilkins.
“Our community expects safe roads, reliable infrastructure, quality libraries, well-maintained pools and the essential services that make Shoalhaven a great place to live. Reducing funding would only make it harder to address our growing infrastructure backlog and meet those community expectations,” Cr Wilkins said.
“We need strong leadership from our state and federal representatives to ensure Shoalhaven communities are properly supported at a local level. Local government is at the frontline of service delivery, and if governments are serious about looking after regional communities, they should be increasing funding to councils, not cutting it,” he said.
The FA Grants program provides an important source of untied funding to local governments, enabling councils to deliver infrastructure and services based on community needs. The Local Roads Component is particularly important for regional councils such as Shoalhaven, which is responsible for maintaining more than 1,900 km of road network across large geographic areas.
Council will provide detailed written feedback to the NSW Local Government Grants Commission before submissions close on 9 October 2026.
