NSW councils warn of $500 million hit from grant changes

Four New South Wales councils—Newcastle, Lake Macquarie, Central Coast, and Mid Coast—are calling on the state government to pause proposed changes to the 2027 Financial Assistance Grants. The councils warn that the changes could result in a combined funding loss of nearly $500 million.

Under the proposed methodology by the Local Government Grants Commission (LGGC), Newcastle could see its annual funding of approximately $15.5 million more than halve, leading to a shortfall of at least $108 million over the next decade. Lake Macquarie faces an estimated reduction of $85 million over ten years.

The LGGC intends to reallocate funding toward councils with residents who have less capacity to pay higher rates. Council leaders have warned that these cuts may force ratepayers to face steeper rates or result in reduced services. The LGGC is currently conducting stakeholder consultations to gather feedback on the new methodology.