The grant is bittersweet for the council, as it was allocated under the government’s Financial Assistance Grant program.

The council would have been in line to receive about 2.5 per cent more, however the federal government announced in its 2014-15 budget it would no longer index the grants to the Consumer Price Index (CPI).

The $6,575,039 allocation will be spent on infrastructure, health, recreation, environment, employment and roads projects.

Eurobodalla Shire Council mayor Lindsay Brown said it was a good thing to receive the grant but he was concerned with it not being indexed.

“We are very disappointed that indexation has not been applied to the grant,” he said. 

“It will cause a cost in the first year of $165,000 to our bottom line that we weren’t expecting so we have had to redo our budget to manage that. 

“By year four we expect that it would have cost council up to $800,000. 

“That’s the sort of hit we are going to take to our bottom line to manage our infrastructure.”

In the past, Financial Assistant Grants were calculated on population and infrastructure needs as well as being indexed in line with the CPI. 

“The government has taken away the indexation,” Cr Brown said. 

“What we have is a double whammy effect here where our CPI doesn’t allow us to keep costs in line with current expenses because we don’t get the extra two-and-a-half per cent. 

“Plus the cost of products have gone up as well so we are going to have less money to spend to manage the same sort of infrastructure we have in the past.

“It is a really big hit to our bottom line.”

Cr Brown said he had been in contact with the relevant ministers to push forward the issue of how it would impact council’s bottom line.

“It will make local governments really under the pump financially to provide the services the community expects,” he said. 

He said council’s priorities were road networks but this funding was for existing projects and infrastructure, not new projects.  

“The Financial Assistant Grants are a fixed amount of money that we can spend where we see fit, unlike other opportunities that the federal government offers where it is a competitive process and we have to put in a bid for funding,” Cr Brown said. 

“We have to find this short fall of funds from our current projects. 

“We are very concerned about it and are hoping this will actually start to resonate amongst the broader local government areas across Australia.”

Member for Eden-Monaro Dr Peter Hendy said the federal government was providing $2.3 billion to local councils nationwide in 2014-15 alone, including $715.7 million to NSW councils.

“The Coalition Government is committed to supporting local communities to deliver the services and facilities they need,” he said.

Dr Hendy said he was looking forward to seeing local councils target local priorities with this funding.