Budget 2014: South Australian councils to miss out on additional road funding

BUDGET: South Australian Supplementary Local Road Funding has been axed, sending shockwaves through the Local Government Association of South Australia.
BUDGET: South Australian Supplementary Local Road Funding has been axed, sending shockwaves through the Local Government Association of South Australia.

South Australian councils hoping to secure Federal Government funding for road projects may be left to foot the bill with supplementary funding getting the axe.

The Federal Government previously provided the state with $17.8 million in 2013-14 to be used by councils on local roads.

That funding is set to cease, with no future provisions made for supplementary funding to South Australian roads.

The additional funding was announced in 2011 to address South Australian councils' disadvantages under the inter-jurisdictional distribution of the local road component of the financial assistance grants.

There will be a slight increase in the state's Roads to Recovery funding, increasing from $31.1 million in 2013-14 to $31.5 million from 2014-15 through to 2017-18.

Additional funding of $31.5 million will be available in 2015-16, to be funded through the Asset Recycling Fund.

Coorong, Goyder, Karoonda-East Murray, Mount Barker, Tatiara, Yorke Peninsula were just some of the councils to receive hundreds of thousands of dollars from the supplementary local road fund in 2013-14.

The cut sent shockwaves through the Local Government Association of South Australia and local councils.

LGA president, mayor David O'Loughlin, described the move as inequitable and unjust.

"We feel completely gutted that the Supplementary Local Road Funding has been cut," he told Fairfax Media.

"It has been at risk since it was developed."

He highlighted the inequity in South Australia's road funding, saying the state received just 5.5 per cent of local roads funding under the Federal Assistance Grants Program but had 11 per cent of the nation's roads.

Prime Minister John Howard had introduced the supplementary funding in 2004 after a parliamentary committee reported that the core funding formula was flawed. 

Mayor O'Loughlin said successive governments had failed to adjust a roads funding formula and instead, South Australia had relied on the supplementary funding as a top-up.

"This is a body blow for councils and their communities. This funding was pivotal to the delivery of good road infrastructure across South Australia," he said.

“This will impact on every SA road user including business.”

Mayor O'Loughlin said  ultimately councils had two choices – they cut road programs by $18 million or they raise council rates to cover the gap. 

"Either way it’s a bad outcome for local communities,” he said.

He said he was disappointed that SA Coalition MPs had not fought harder for the funding. 

Earlier in May, Assistant Infrastructure Minister Jamie Briggs suggested there was no money in the budget for supplementary funding.

The cut to supplementary funding will be discussed by the LGA board at a meeting in Whyalla on Thursday.

District Council of Yankalilla chief executive Adrian Skull: 

"For a small council like ours, this is really disappointing," he said.

"The Yankalilla council district has a road network of some 600 kilometres, much of which is not sealed. On top of that, with a sparse population, many of whom are on low incomes and a large non-resident population, any cut in grant funding hits very hard.

"It makes it incredibly difficult to provide essential services like safe roads. We just don't have the funding pool available to upgrade some key areas, including extra overtaking lanes and sealing roads with heavy usage.

"Like many businesses at the moment, council faces tough times."

Whyalla City Council mayor Jim Pollock:

Mr Pollock labelled the budget cuts “hugely detrimental” to Whyalla.

 “With the release of the coalition budget it is very disappointing to see South Australia as the only state to lose this funding,” he said.

“This is a very serious issue that will affect all local governments in South Australia.

“The detriment this will now place on all local governments in South Australia is huge.”

Mr Pollock said the only positive was the budget was still subject to pass through the senate.

He said the funding cuts would put “critical” pressure on the council.

Mr Pollock said he was also concerned to hear the Financial Assistance Grant (FAG) which all South Australian councils relied on had been slashed.

“From the Financial Assistance Grant, Whyalla sees nearly $4 million annually,” Mr Pollock said.

“This funding is vitally important to the city and with the Financial Assistance Grant ceasing it puts all local governments in a precarious position.”

“We will now have to try and reassess our own budgets without these funds being available.”

A spokesperson for Alexandrina Council: 

"The Budget impacts will be felt at all levels of the community.

"It was confirmed in the budget that the $18 million supplementary funding for identified local roads in South Australia will no longer be continued.

"Any reduction in financial assistance grants will impact our ability to deliver infrastructure projects."

Lucindale-Naracoorte council chief executive officer Dr Helen Macdonald:

"We'll now need to cut some of the projects we had planned, otherwise we'd be looking at a deficit," she said.

"It's not really that surprising for us to be honest. We were anticipating a few budget cuts even as infrastructure grew. That's government."

"It will impact us more greatly over the next three years, we can put rates up higher but we never want to do that."