The interim report on local government sustainability released in February highlighted the multiple hats regional councils have to wear for their communities. 

The report states that councils are increasingly required to look beyond the three Rs (roads, rates, and rubbish) and have to manage complex infrastructure and service issues that were previously the responsibility of the federal and state governments, all while battling declining income.

The inquiry was launched in March 2024 to gather a deeper understanding of local government financial sustainability and funding frameworks, alongside the changing infrastructure requirements and service delivery obligations.

"I think the biggest issue is that the federal government financial assistance grant (FAG) shrunk from one percent of Commonwealth taxation revenue back in 1996 to 0.5 percent," Lachlan Shire Mayor and Country Mayors Association (CMA) Executive Board Member John Medcalf said. 

"That's been dragging us back," he said. "The federal government is not seeing what they do to local councils."

CMA Executive Board Member and Lachlan Mayor John Medcalf is hoping the inquiry will bring change. Photo: Lachlan Shire Councl

CMA Chair and Temora Mayor Rick Firman asked the government to pledge to return FAGs to 1996 levels. 

"A commitment to return to FAGs funding to 1996 levels would substantially improve financial sustainability not just for councils in NSW but for local governments across Australia," Cr Firman said. 

Cuts such as these raise concerns about councils declining revenue. 

"We do everything as local governments," Cr Medcalf said 

The long turnover time for grant funding can mean that costs have picked up since first estimations, and the grant funding no longer cover costs. 

"It could be 12 months before we get the grant through. Costs could have gone up 10, or 20 percent in that time," Cr Medcalf said.

CMA Deputy Chairman Mayor of Bega Valley Shire Russell Fitzpatrick said grants are the main source of revenue for several rural NSW councils. 

"Grants are over 70 percent of the revenue of some rural NSW councils. Their rate base is stagnant. So, even rate hikes cannot help them much," Cr Fitzpatrick said. 

The lack of services and the pressure councils face in navigating them was highlighted by the mayors. 

One example is the lack of public transport options, particularly for patients who have to get to a specialist appointment. 

Condobolin's only physiotherapist is retiring in April leaving a gap in that field.

"It doesn't make life easier," Cr Medcalf said. 

"If you need transport to go to somewhere. You have to make sure you have all your ducks lined up to make it to that appointment." 

The interim report left the CMA hopeful that the final report will hear their predicament.

"The interim report documents that the plight of rural and regional council has been conveyed and heard, loud and clear," Cr Firman said. 

"We have hope that the inquiry's resultant final recommendations for improving financial sustainability in local government will include boosting federal funding."