Australia's National Local Government Newspaper Online

Changes to Financial Assistance Grant payments

Under the Commonwealth government's tax reform policies, responsibility for distributing financial assistance grants to local government will shift from the Commonwealth to the States and Territories. This change will take effect from July 2000.

Change in timing of payments
Legislation has been introduced to allow the Commonwealth to finalise grants payments for the 1999-2000 period by 30 June 2000 &emdash; before States and Territories takeover this responsibility in July 2000. The introduction of the A New Taxation System (Commonwealth-State Financial Arrangements Consequential Provisions) Bill would mean that the May 2000 quarterly payment will be divided into three monthly payments occurring in April, May and June 2000.

Any CPI or population adjustments to reconcile the difference between estimated assistance entitlements and actual entitlements &emdash; which would normally occur in 2000-2001 &emdash; will be made in the June 2000 payment.

Financial Assistance Act to be repealed
The New Taxation System Bill amends the existing Local Government (Financial Assistance) Act 1995, which will be repealed in July 2000 when States and Territories become responsible for distributing financial assistance to local government.

States agree conditions will not change
Financial assistance grants will be paid on a real per capita basis factoring in changes in the CPI and population. The payment of GST revenue for financial assistance grants is conditional on States and Territories maintaining the existing arrangements and conditions.

An inter-governmental agreement signed at the recent Premier's Conference will ensure that local government will be no worse off under the new arrangements.

For more information call the National Office of Local Government on 1800 065 113

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