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New funding methodology now in place

In April last year, Cabinet approved the revised methodology for the distribution of the Northern Territory Operational Subsidy. This subsidy provides the main financial support to non municipal local governing bodies to assist them in the provision of Local Government services.

The new methodology was used for the calculation of the 2000/2001 funding allocations. The funds, amounting to $14.87 million are still untied and are distributed in accordance with the new formula based on population that provides for the following.

• Removal of the current $70,000 base grant
• Replacement of the current population based grant to an expenditure needs based grant
• Introduction of a distributed service delivery incentive to encourage Councils to provide services over greater distances with the introduction of a variable pool of funds capped at $1 million and distributed on the basis of road length and area of governance.
• The retention of the current method of distribution of the revenue raising incentive, but based on a subsidy of fifty cents in the dollar from a capped pool of $1.5 million.
• The phasing in of the revised grant allocations over three years to minimise financial hardship to Councils.

The calculated grants are then adjusted in line with the total funding available for the program This new distribution methodology is also part of the Reform and Development Agenda and is considered a significant achievement.

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