WSROC is calling for a fairer approach to distributing Financial Assistance Grants, warning that proposed changes could shift financial pressure between councils rather than address the broader funding challenges facing local government.

In its submission to the NSW Local Government Grants Commission's review of the Financial Assistance Grants allocation methodology, WSROC has drawn on the experiences and submissions of Western Sydney councils to highlight the different financial pressures facing communities across the region.

WSROC supports the review's objective of making the funding model simpler, more transparent and better aligned with councils' relative financial need.

However, the proposed changes would redistribute an existing pool of funding, potentially resulting in substantial reductions for councils already managing population growth, infrastructure backlogs, natural disasters and increasing demand for services.

Different councils, different financial pressures

WSROC's submission draws on examples from across Western Sydney to demonstrate why financial need cannot be measured by population, location or revenue capacity alone.

For example:

• Blacktown City Council faces an indicative annual funding reduction of approximately $6.24 million, or 30 per cent, while managing significant population and housing growth.
• Cumberland City Council faces an indicative reduction of around 17 per cent, despite high demand for community services and limited household capacity to absorb additional costs.
• Blue Mountains City Council faces unique costs associated with its dispersed settlements, challenging terrain, road networks and substantial visitor population.
• Hawkesbury City Council faces an indicative reduction of approximately $1.66 million, or 31.9 per cent, despite significant infrastructure and recovery costs following repeated natural disasters.

These examples demonstrate that councils face very different circumstances, and that a fair funding model must recognise the actual costs of delivering services and infrastructure.

A fairer approach to funding local government

WSROC's submission calls for several improvements to the proposed methodology, including:

• Better recognition of population growth, socioeconomic disadvantage, infrastructure pressures, disaster impacts and community capacity to pay.
• More accurate assessment of councils' ability to raise revenue, including recognising that many government grants are tied to specific services and obligations.
• A revised approach to local roads funding that better reflects road usage, condition and maintenance costs.
• Greater transparency about how funding allocations are calculated, with appropriate transition arrangements for councils facing significant reductions.

Importantly, WSROC is also calling on the Australian Government to increase the overall Financial Assistance Grants funding pool, with support from the NSW Government and Local Government Grants Commission.

Supporting councils across NSW

WSROC recognises the need to provide greater support to rural, regional and remote councils experiencing financial disadvantage.

However, addressing these challenges should not come at the expense of other councils facing their own significant financial pressures.

The submission emphasises that financial sustainability is a challenge across the local government sector, and that increasing support for councils in need requires adequate overall funding.

By bringing together the different experiences of Western Sydney councils, WSROC is advocating for a funding system that better reflects local circumstances, supports councils' long-term financial sustainability and protects their ability to deliver essential services and infrastructure.

Read WSROC's submission