Fair Federal Funding for South Australia’s Local Roads
Without a renewed commitment from the Federal Government, South Australian councils will cease to receive supplementary road funding in 2019-20, at a cost to the sector of $20 million per year.
This funding helps South Australian councils keep their roads safe for motorists by upgrading and maintaining their local road networks.
The LGA’s Fair Share of Road Funding for South Australia document provides further details on the unfair level of funding received by South Australian councils.
South Australia has 11% of Australia’s local roads, and 7% of its population, but only receives 5.5% of the Identified Local Roads component of Commonwealth Financial Assistance Grants (FAGs).
Since 2003, successive Federal Governments have allocated supplementary road funding to South Australia as a temporary fix to an unfair funding formula.
South Australian local government is asking all political parties and candidates to commit to maintaining a fair share of road funding for our local communities ahead of the 2019 Federal Election.
This supplementary funding was cut in the 2014–15 Federal Budget and temporarily reinstated in 2017-18 at $20 million per year for two years.
Supplementary road funding is not guaranteed beyond 2018-19, and without a renewed commitment, communities in South Australia will once again be without a fair share of Australia’s road funding.
Fixing South Australia’s road funding anomaly is one of the 12 initiatives in the Australian Local Government Association’s (ALGA) All Politics is Local federal election advocacy.
South Australian councils are not asking for more – just a commitment to extend and make permanent a fund that was first established in 2003. This is essential to ensure local government can deliver safe, fit-for-purpose road networks now and into the future.
South Australian communities, residents and businesses deserve a fair share of federal road funding.
Financing local roads – the challenge for councils
Roads lay the foundation for economic and social progress. They are the key infrastructure that connects and supports communities, families, businesses, community inclusion, access and safety.
South Australia councils plan, design and maintain 75,000km of road in their local areas.
Unlike federal and state governments, councils cannot raise funds through fuel sales, road use, vehicle registration or other road/transport related charges. As such, the funding provided by the Federal Government is critical to Australia’s local road network.
Supplementary road funding is essential in supporting South Australia’s regional communities, which have large geographic areas and relatively low populations. Regional councils have limited capacity to raise their own road funding through council rates.
Adequate road funding is vital to underpin a productive rural economy and support the regions as a place to live, work, invest and visit.
Without supplementary road funding, South Australian councils receive an unfair share of local roads grants, both on a per kilometre and a per capita basis.
Financial Assistance Grants 2018-19
The Federal Government’s Financial Assistance Grants program will provide $2.46 billion across all Australian councils in 2018-19.
The Financial Assistance Grant program is provided under the Local Government (Financial Assistance) Act 1995 and consists of two components:
- a general purpose component which is distributed between the states and territories according to population (i.e. on a per capita basis); and
- an identified local road component which is distributed between the states and territories according to fixed historical shares.
Both components of the grant are untied in the hands of local government, allowing councils to spend the grants according to local priorities.
South Australia’s allocation comprises:
- $118.7 million General Purpose Grants
- $41.5 million Identified Local Roads Grants
- $20 million Supplementary Roads Funding
The $20 million supplementary local road funding for South Australian councils for 2018-19 was distributed as follows.