WYNDHAM Council faces a budget shortfall of close to $600,000 after the federal government reduced its local government grants program.
The government corrected its financial assistance grants earlier this month, wiping $24.4million from council budgets across the country.
Grant payments are estimated by the government and then adjusted based on the consumer price index and population growth figures from the Australian Bureau of Statistics.
The adjustment led to Wyndham’s grants being reduced by $599,913.
Wyndham’s corporate services director Steve Lambert said the council had lost close to 5per cent of its federal government grants.
“Wyndham is currently working through the ramifications of [the reduction] in the estimated allocation of federal government financial assistance grants.
“Wyndham City budgeted for $13million in grants, based on an estimate provided by the federal government in May.”
Municipal Association of Victoria president Bill McArthur said he had written to Local Government Minister Simon Crean to express his concern about the timing of the changes.
“Councils have already set their budget for 2012-13 and could be forced to cut some of their promised initiatives or increase their debt levels to plug the shortfall,” Cr McArthur said.
“The timing of this funding loss exposes a lack of thought for the communities who will be impacted by the Commonwealth’s faulty figures. Future revisions to financial assistance grants should be timed to provide councils with adequate notice of any reduction, so it can be factored into budget processes and options discussed with communities.”
A government spokesman said it was not unusual for local government grants to be adjusted.
