Government budgets, taxes and your roads

Last week’s federal budget included great news for councils and especially small rural South Australian councils like the Elliston District Council with our extensive road network and small ratepayer base.

Elliston District Council chairman Kym Callaghan.

Elliston District Council chairman Kym Callaghan.

First, some background - taxes collected by councils are less than 4 per cent of the total taxes paid by Australians.

The federal government collects approximately 80 per cent of the taxes Australians pay, while state governments collect about 16 per cent.

Some of the tax revenue that is collected by federal, state and local government is shared or passed on between the different levels of government.

Even with the support of the federal government and state governments, local government still only spends 4.5 per cent of all taxes collected.

Roads are our single biggest expenditure at Elliston District Council and many other councils like ours.

Despite South Australian councils managing 11 per cent (75,000 kilometres) of the nation’s local road network and having more than 7 percent of the nation’s population, we receive only 5.5 percent of Identified Local Roads Grant funding from the federal government.

Financial Assistance Grants

The federal government does provide Financial Assistance Grants (FAGs) to help councils but that fund was frozen in the 2014/2015 federal budget.

This has made it difficult for small South Australian rural councils in particular to keep our roads to the appropriate standards.

Last week’s federal budget reversed that decision.

Councils and communities will benefit from millions in additional funding with the return of Financial Assistance Grants (FAGs) indexation.

The budget also reinstated supplementary road funding, with councils in South Australia to share in $40 million over the next two years.

Credit to our local Member of Parliament Rowan Ramsay, and his federal government colleagues, for restoring fairer road funding for South Australian councils in this year’s budget.

Kym Callaghan

Elliston District Council

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