City of Newcastle and Lake Macquarie City Council have today welcomed a decision by the NSW Government to abandon proposed changes to Financial Assistance Grants that would have resulted in them losing almost $200 million over the next decade.
The Local Government Grants Commission wrote to Lord Mayor Gavin Morris and Mayor Adam Shultz on Friday stating that it has decided not to implement a new methodology that would have seen funding that has always gone to Newcastle and Lake Macquarie redirected to other local councils. Instead, the existing methodology will continue to apply.
Under the proposed changes, hundreds of millions of dollars in annual funding was to be redirected away from councils across NSW whose ratepayers were perceived by the NSW Government to be able to afford to pay more in rates. The proposed funding cuts were to commence from 1 July next year.
Both councils last month passed unanimous resolutions opposing the proposed funding cuts.
Council |
Current annual funding |
Proposed funding |
Annual cut in funding |
Toal funding cut over ten years |
Lake Macquarie City Council |
$21 million |
$13.8 million |
$7.2 million |
$85 million |
City of Newcastle |
$15.5 million |
$6.1 million |
$9.4 million |
$108 million |
Central Coast Council |
$32 million |
$12 million |
$20 million |
$237 million |
MidCoast Council |
$24 million |
$19 million |
$5 million |
$55 million |
Newcastle Lord Mayor Gavin Morris:
"The funding cuts would have been devastating for Newcastle residents.
"I met with Premier Chris Minns earlier this month and told him these cuts were terrible for our city. He listened and assured me he understood why I had to speak up. The Premier has taken action and I thank him for putting a stop to these funding cuts.
"City of Newcastle is a financially sustainable council where just one third of its income comes from rates. We run balanced budgets and deliver record infrastructure programs for more than $5 billion in assets. But we acknowledge this work is done with the support of about $15 million annually from the Federal Government. Every cent of that money goes into our roads and community services.
"Right now we are living in a cost-of-living crisis. Fuel prices are at record highs. Interest rates have been climbing for several years. I could have never asked ratepayers to dip into their pockets to make up the shortfall if the NSW Government had stripped Newcastle of almost $10 million annually, just so they could prop up another local council.
"I'd like to thank our colleagues at Lake Macquarie, the Central Coast and MidCoast councils for standing alongside Newcastle and telling the NSW Government these funding cuts were a terrible idea.
"I'd also like to thank Muswellbrook Mayor Jeff Drayton for his support for Newcastle and Lake Macquarie councils in our fight to retain our Financial Assistance Grants."
Lake Macquarie Mayor Adam Shultz:
"Lake Macquarie City Council (LMCC) welcomes the announcement from the NSW Government Grants Commission. It is a big relief and provides much needed funding certainty as the proposed changes to Financial Assistance Grants of $7.2 million a year for Lake Macquarie were set to take effect from 1 July 2027.
"LMCC thanks all our local State Members of Parliament and the United Services Union who we engaged with as part of this process. They heard our concerns loud and clear and have acted to support our communities.
"The key principle of our advocacy was that no council should be worse off. We sought transitional arrangements for any reallocation and believe it should align with the Federation Compact with Local Government to provide financial certainty to all councils in NSW. Our requests were granted on Friday afternoon and we are grateful for the outcome."
