2014 Federal Budget
Cuts to Local Road Funding to SA Councils
Local Government in South Australia is shocked at the recent Federal Budget measures that mean cuts
to road funding are proportionally bigger for South Australians than for everyone else in the nation.
All SA communities will suffer from the Federal Government's decision to jettison the Supplementary
Local Road Fund which equalised a major national road funding program known as Identified Local
Roads Grants. These Grants are paid under the Local Government (Financial Assistance) Act and the
Supplementary Funds addressed an unequal share of the funds to South Australian Local Government.
KEY FACTS – Road Funding
South Australian Local Government
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manages 11% (75,000km) of the nation's local road network
has approximately 7.2% of the nation's population
only receives 5.5% of Identified Local Roads Grant funding
A 2006 review by the expert body established by the Parliament to determine fair distribution of funds
between States and Territories, the Commonwealth Grants Commission, recommended SA should get
8.9% of the funds.
Supplementary Funding brought SA Councils up to 7.9% (from 5.5%) of the Identified Local Roads
Grant. This wasn’t a bonus; it just gave us a fair go.
The LGA raised this matter with the Federal Government before and after the recent election. The
Federal Government's decision has been made knowing that it only affects South Australia and that as a
result it will be funding South Australian Council local roads at a lower level than any other State from 1st
July 2014.
Lost revenue from cessation of Supplementary Local Roads Grants
2014-15
$18m
2016-17
$20m
2015-16
$19m
2017-18
$21m
Total
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$78m
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BACKGROUND INFORMATION
Since 2004-05, SA Councils have benefited from the Supplementary Local Road Funding Program
which was introduced to compensate Councils for the unfair share of grants they had been receiving
under the Identified Local Roads arrangements.
SA manages 11% of the nation's road network yet only receives 5.5% of the national Identified Local
Roads grant. The formula for allocation has been found by various Federal reviews to be fatally flawed.
For an extended period of time SA Councils have made representations to the Federal Government to
address SA’s grossly unfair share of funding.
In 2003 a House of Representatives Standing Committee identified the disadvantage to SA Councils and
agreed that the historical formula lacked transparency.
Shortly after the disadvantage was recognised by the Standing Committee, the Federal Government
addressed the inequity by introducing the Supplementary Local Road Program, initially for three years.
Successive Federal Governments extended the arrangements through to 2013-14.
Following representations by the LGA, supported by Councils, the Federal Government also sought a
long term solution by asking Australia’s leading body with expertise in funding distribution, the
Commonwealth Grants Commission (CGC), to ‘recommend a new methodology for the distribution of
Identified Local Roads Grants to Local Government. The methodology should ensure that the
distribution of this funding is based on the relative needs of Local Government in States and Territories
for local roads rather than the current historical share.’
A 2006 CGC review recommended that as an interim measure, local roads grants be distributed among
the States on the basis of average expenditure per person in urban, rural and remote areas and the
population of each State resident in those areas. The Federal Government failed to deal with this issue
at that time.
The 2014 Federal Budget papers confirm that Supplementary Local Road funding to SA Councils will not
be extended beyond 2013-14.
The Budget papers also flag increases in Roads to Recovery funding and the Federal Black Spots
program however these programs will not address the underlying inequality that currently exists.
What this means to [insert Council name here]:
[Insert the projects at risk here]
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