Australian Federal Government Announces Federation Compact to Boost Local Council Funding

The Australian Labor National Conference endorsed a Federation Compact that will increase untied Financial Assistance Grants for local councils and allow Roads to Recovery funds to be used for plant and equipment purchases. ALGA President Mayor Matt Burnett highlighted that grant funding has fallen from about 1% of federal tax revenue in 1996 to 0.49% in 2026‑27 and said the compact recognises the growing financial pressures on councils responsible for infrastructure, disaster response and community services.

Local Government NSW President Darcy Byrne welcomed the announcement, calling the funding boost a breakthrough for councils, especially those in rural, regional and remote areas facing a severe financial crisis. The five‑year compact also pledges greater apprenticeship and employment programs, and new capabilities in housing, planning, emergency management and aged care, together with an annual summary of local‑government funding.