The Coalition has ruled out increasing Federal Assistance Grants (FAGs) to one per cent of Commonwealth tax revenue if elected to government at a national gathering of councils.

The Australian Local Government Association (ALGA) has long been lobbying for the increase, saying the grants have dropped in real terms since they were introduced and current funding levels are insufficient.

But the opposition’s local government spokeswoman Bridget McKenzie on Wednesday told ALGA’s National General Assembly in Canberra this would not be Coalition policy.

Instead, Senator McKenzie said the funding structure needs to change to recognise disparities between well resourced, large councils and and their smaller regional counterparts.

“We won’t be supporting the one per cent increase claim,” Senator McKenzie said.

“Rather than saying a one per cent increase for everybody, I would actually be seeking for ALGA to put forward a motion that recognises small and regional councils to get them on a sustainable footing.

“Under a coalition government the one per cent won’t be occurring.”

The senator also attacked Labor for failing to deliver on its pledge to provide ‘fair increases’ to FAGs, and described the current inquiry into local government sustainability as ‘a ham fisted attempt’ to cover up a broken promise.

ALGA stands firm

The comments came after ALGA president Linda Scott spoke against individualising FAGS in an address at the National Press Club on Tuesday.

She noted it was a contentious issue and that opinions varied, but said a key recommendation of ALGA’s submission to the federal local government sustainability inquiry was not to tamper with the FAGs funding model.

“We recommended not changing the formula of funding to individual councils,” she said.

“Changing the way the pie is sliced doesn’t help when we actually just need a larger pie.”

On Wednesday Cr Scott  said over the last three decades FAGs had slipped from one per cent of tax revenue to just half a per cent in present day terms.

“We must not back down from our unified position the federal assistance grants must be restored  to at least one per cent,” she said.

“This is the last NGA before the federal election our focus will be on restoring FAGS.

“We can continue to fight about the shape of the pie, but together there will be more of the pie,” she said.

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