Budget to hit local governments hard with grant freeze

THE Local Government Association of Queensland claims communities across the state are set to miss out on hundreds of millions of dollars in funding after the Federal Government announced a freeze on financial assistance grants to councils.

Federal Treasurer Joe Hockey made the announcement on Tuesday when handing down his first Federal Budget.

Local Government Association of Queensland chief executive Greg Hallam said on Wednesday the decision meant smaller councils would not escape bearing some of the pain from the budget.

He said the three-year freeze was likely to hit rural, remote and indigenous communities hardest as these councils rely on such grants for much of their income.

"Local councils have done as much as they can to become more efficient so this decision is likely to hit jobs and community projects," he said.

"On top of the increased transport and building costs to councils as a result of the indexation of fuel excise, this budget is going to be felt by local councils in Queensland and the communities they serve for years to come.

"Rural, remote and indigenous councils get the double whammy . . . a freeze on grants at a time when petrol and diesel costs will rise."

Queensland Treasurer Tim Nicholls expressed similar concerns as the fallout from the federal budget was digested across the state.

"Of particular concern is the freezing of indexation payments to local governments," he said.

"The state is not in a position to assist, given our own budget repair task, so this reduction in funding is going to increase the strain on local governments."

Premier Campbell Newman kept to his pre-budget promise to call it the way he saw it.

He said there was aspects of the budget he was happy with, but there were other aspects he was not pleased with.

"I welcome an increase in road funding," he said.

"I note that the fuel excise will particularly hurt a state like Queensland because of the vast distances and the kilometres that are travelled, but if all the money is ploughed back into roads with this $13.4 billion commitment, well that is good.

"If there is an ongoing commitment to this money, that is good as well.

"But my concerns are in those health and education areas particularly."

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