Monday, October 6, 2008
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Local Government
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Department of Local Government and Regional DevelopmentGovernment of Western Australia Local Government Grants Commission
The Western Australian Local Government Grants Commission (the Commission) is a statutory body established by State legislation, the Local Government Grants Act 1978. Its principle function is the making of recommendations to the State Minister on the allocations of "general purpose grants" amongst 139 local governments in WA. These general purpose grants are the State's cash entitlement for financial assistance from the Federal Government, paid in equal quarterly instalments for a financial year, under the Australian law, Local Government (Financial Assistance) Act 1995. The distribution of Commonwealth Government Financial Assistance Grants is for local government purposes, to achieve equitable levels of services, by reasonable effort. The Role of the Western Australian Local Government Grants Commission The general purpose funding provided to local governments ($220m in 2008-09) is untied, ie there are no conditions on how the funds should be spent. The Western Australian Local Government Grants Commission consists of, a chairperson, a deputy chairperson and three elected members from local government. The Commission is supported by staff employed by the Department of Local Government and Regional Development. Western Australia received approximately 11.67% of the national grant allocation in 2008/09. This amount is divided into two parts, an equalisation component and a local roads component. The funding provided to local governments is allocated on the basis of horizontal equalisation, to ensure that each local government in the State is able to function at a standard not lower than the average standard of other local governments. One principle states that there is a minimum grant amount which a local government has to receive. That minimum cannot be less than 30% of what it would receive if all grants were allocated on a per capita basis. Prior to the 2008/09 grant determination the Commission calculated the equalisation requirement of each local government by assessing the revenue raising capacity and expenditure need of each local government in what is called the Balance Budget approach. Eight categories (called standards) have been used to calculate revenue raising ability and seven categories have been used to establish expenditure need. The equalisation requirement is the difference between the assessed expenditure need and the assessed revenue raising capacity of each local government. A range of disability factors have been developed by the Commission, e.g. location, population dispersion and climate, and these are applied to the standards to recognise the additional costs a local government faces due to its physical or demographic characteristics. In determining the local road funding for local governments, the Commission has established the Asset Preservation Model. This model is used to assess the cost of maintaining a local government’s road network and takes into account annual and recurrent maintenance costs and the costs of reconstruction at the end of a road’s useful life. The Grants Commission is required to keep up with the changing face of local government to ensure that its methods reflect the operations of the industry. As part of this process, the Commission visits approximately 30 local governments each year to hold Public Hearings. This visiting programme provides a valuable opportunity for local governments to inform the Commission of the issues they are facing. The Commission also receives submissions from local governments each year seeking modifications to the grant determination process so that it will reflect their needs more effectively. Methodology Review In March 2008, the Commission resolved to undertake a review of its current grant methodology for general purpose grants prior to the 2009/2010 determinations. The grants for 2008/2009 have been pegged at 2007/2008 levels, with an escalation factor equivalent to the percentage increase in the total WA pool for 2008/2009 after the minimum grant local governments have been deducted from the funding pool. Local governments that received a minimum grant in 2008/2009 had their grant calculated on a per capita basis in accordance with the Minimum Grant Principle established under the Local Government (Financial Assistance) Act 1995. Road grants will continue to be calculated using the Asset Preservation Model and as such there will not be any change to the manner in which road grants are determined. In recent years, local governments have raised a number of issues in their submissions and public hearings with the Commission. All these issues are being considered as part of the review. The Commission has developed a discussion paper and questionnaire which it has sent to all local governments. A copy of the paper can be downloaded below.  Discussion Paper - WALGGC General Purpose Grants Methodology Review 2008 DOC 172.00KbContact Us To contact the Grants Commission please go to our Contact page.
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Page last updated on Tuesday, September 23, 2008
Page last updated on Tuesday, September 23, 2008
© 2008 Department of Local Government and Regional Development