Australian local governments call for funding reform

Local government representatives in Australia are advocating for significant funding reforms to ensure fiscal sustainability. At the Local Government Association of Tasmania’s 2026 Annual Conference in Hobart, discussions focused on the role of local leadership and the need for councils to receive a larger share of Commonwealth funding.

In South Australia, five regional local government associations representing 46 of the state’s 68 councils have united to present recommendations to a Parliamentary inquiry. The groups are calling on the Federal Government to restore Financial Assistance Grants Funding to at least 1% of Commonwealth taxation revenue. They are also advocating for a shift from competitive grant programs toward fairer, formula-based funding models.

Regional leaders emphasized that current funding models are unsustainable given the increasing breadth of council functions and the heavy cost of maintaining essential infrastructure—such as roads, airports, and jetties—on small, dispersed rate bases. They argue that investing in regional councils is vital for national productivity, food security, and economic resilience.