Regional mayors criticise millions in govt funding cuts, now fear rate rises

North Burnett Acting Mayor Robbie Radel, Toowoomba Mayor Paul Antonio, Bundaberg Mayor Jack Dempsey, Fraser Coast Mayor George Seymour and South Burnett Mayor Brett Otto have all taken a stand against the Queensland Local Government Grants Commission, whose new methodology for allocating the Federal Government's Financial Assistance Grants will see their councils worse off.

The QLGGC revealed in December that 50 out of 77 councils will receive a greater funding allocation, while the other 27 councils will receive a reduced allocation.

Over the next three financial years, Toowoomba is set to lose $7.9 million, while North Burnett, Bundaberg, Fraser Coast and South Burnett expect to lose $2 million each.

North Burnett Regional Council Acting Mayor Robbie Radel said council received a "bombshell" letter from the Government in December advising that $700,000 a year in Assistance Grants would be removed over the coming three years.

"Council supported a review, however, how a financially stressed council that cannot generate further revenue is having funding reduced is unbelievable," Mr Radel said.

"It does not meet the equity factor that the State Government is making this new methodology out to be.

"The engagement from the Queensland State Government on this bombshell funding cut has been absolutely disgraceful."

Two Councils in the Hinkler electorate fear they will have to raise rates or reduce community services after the Grants they receive were cut by about $2 million each.

Bundaberg and Fraser Coast Mayors Jack Dempsey and George Seymour said the new formula being used by the Commission to distribute the grants was "unfair, unjust and inequitable".

"With 81 per cent of the tax collected in Australia going to the Federal Government, 16 per cent to State Governments and only three per cent going to local governments, councils rely on grants like these to deliver the services our local communities need and deserve," Mr Seymour said.

"The new formula the Grants Commission is now using puts our two councils in the same bracket as councils like Brisbane, Cairns and the Gold Coast and fails to take into account the high level of socio-economic disadvantage in Hinkler.

"Bundaberg and the Fraser Coast are now placed in the minimum grant group despite the fact we have among the highest levels of unemployment in the country, more people on age pensions, more people with disabilities and a much lower median weekly household income.

"We simply don't have the same capacity to pay as our counterparts in metropolitan areas as the Grants Commission has claimed."

Mr Seymour said the Fraser Coast had almost 40 per cent of its community on pensions compared to the Queensland average of 20 per cent while the median weekly household income is $906 compared to the state average of $1402.

Toowoomba Regional Council Mayor Paul Antonio has called the move "a kick in the guts".

"In local government we're the community builders for our residents," Mr Antonio said.

"To do this, we need adequate funding from the State and Federal Government and any decision to reduce our current level of funding is a kick in the guts to our residents."

Mr Antonio said TRC was set to become a 'minimum grant council' under the new Financial Assistance Grant allocation methodology, starting from the 2022-23 financial year.

"This decision has been made on the view that our council is financially stable enough that it only requires minimum funding revenue which is hard to take," he said.

"In other words, we're being punished because of the way we've carefully managed our finances over the years."

Over the next three financial years, council estimates the reduction to be around $7.9 million.

The reduction in funding equates to an increase in general rates by an additional three per cent.

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At a December council general meeting, South Burnett Regional Council Mayor Brett Otto said he was "highly disappointed" at the process and outcome of the review.

"Not only am I disappointed, but I am completely bemused and confused at to how a seven per cent reduction in FAGs grants can be justifiably applied to a rural regional council that has been dealing with drought for some 40 years," Mr Otto said.

"This council has worked very hard to balance its budget and deliver services in an increasingly challenging environment.

"It seems to me we are being disadvantaged because of that - in fact punished - because of the fact that we have worked really hard, put our shoulder to the wheel, have done the heavy lifting on financial sustainability on our own back.

Mr Otto said they had not asked for an increase of the FAGs grants, but rather they be held at the same level.

"To now apply another reduction - to rip $2 million out of our budget over the next three years - is simply punishing our council for doing what the government has asked us to do," he said.

"I was not consulted as the mayor or finance portfolio holder. There was no opportunity for us to provide feedback to this recommendation. This has been slapped on us at the 11th hour without appropriate consultation."

A State Development, Infrastructure, Local Government and Planning spokesperson said the Queensland Government was committed to advocating with the Commonwealth Government for a better funding deal for Queensland councils from the Financial Assistance Grant.

They said it had been about 10 years since the Commission's last review of the methodology and the need for a review of the methodology was supported through feedback received by the Commission from Queensland councils.

"The Commission's review focused on considering if there is a more equitable distribution for the Financial Assistance Grant."

In a joint statement from Member for Hinkler Keith Pitt and Assistant Minister for Local Government Kevin Hogan, they said funding allocations to councils in Queensland were decisions for the Commission, which provided advice directly to the Queensland Government about best distributing these funds.

"Any changes to the formula used for Financial Assistance Grant allocations to Queensland councils would be a decision of the Commission and require approval by the Queensland Government," they said.

They said the Australian Government had provided over $61 billion under the Financial Assistance Grant program to local government since 1974-75, including $531 million to Queensland councils in 2021-22.

Further, they said Queensland's allocation had risen year on year from 2016-17 to now, increasing by 17 per cent or $74.7 million over that period.

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