Of the funding, $220 million will go to help councils build and modernise community facilities, including town halls, libraries, community centres, sports grounds and environmental infrastructure.

A further $25 million will be allocated over two years to a Local Government Reform Fund to help councils better manage their infrastructure and plan for future needs in their communities.

The boost for community infrastructure will be a “shot in the arm” for Queensland councils, the Local Government Association of Queensland (LGAQ) said.

Acting LGAQ President Bob Abbot said many councils had significant infrastructure backlogs and would use the additional funds to deliver projects in their communities.

Cr Abbot said the announcement was especially timely following the state government’s decision to axe subsidies to local governments as part of its state budget.

“This shows the Federal Government is serious about backing up its new partnership with councils with real financial investment into local government.

“In the past six months, the Rudd Government has allocated more than $1 billion to councils to fund local community infrastructure.

“It is the most significant advancement in local government funding in almost a decade.”

Infrastructure deficits

Cr Abbot said councils across the country were facing a growing infrastructure funding deficit of more than $14.5 billion and up to 30 per cent of Australian councils were in urgent need of financial assistance.

“The extra money announced today is another step in the right direction to help turn this financing crisis around,” he said.

Local Government Association of South Australia (LGA) president, Felicity-ann Lewis, said the extra investment would support local jobs at a time when communities are being affected by unemployment.

“This extra funding commitment, which adds another $30,000 to the Government’s previous commitment of $100,000 minimum to each of Australia’s 565 Councils, will help us to continue to implement projects that are good for jobs, good for local contractors and good for our communities.”

Refreshing change

President of the Local Government Association of New South Wales, Genia McCaffery, said the funding would provide councils with a glimmer of hope in financially testing times.

"It’s refreshing to see a Prime Minister who understands the financial challenges experienced by councils, and is prepared to do something about it," said Cr McCaffery.

"The local community infrastructure funding will help revitalise NSW communities, and provide our residents with much-needed, long-awaited community facilities.

President of the Shires Association, Cr Bruce Miller, said there would be significant benefits for rural and regional councils across Australia.

"Any regional or rural mayor will tell you they’ve got plans for crucial local projects – such as roads and bridges – sitting in their drawers waiting to be built, but just don’t have the money to get the ball rolling," he said.

"The boost to local employment and business generated by the fund is much needed in the regions, and I look forward to seeing our communities reap the benefits of this crucial funding."