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2021 Methodology Review

Background

The Queensland Local Government Grants Commission (the Commission) has commenced a review of the methodology for the allocation of the Commonwealth Financial Assistance Grant (FA Grant).

It is ten years since the last major review was completed. The need for a review is supported through feedback received by the Commission from Queensland councils and is in line with a resolution of the 2020 Local Government Association of Queensland Annual Conference.

The Commission has engaged Queensland Treasury Corporation to undertake a comprehensive review of the FA Grant allocation methodology.

The Commission strongly believes a more equitable distribution of the FA Grant can be achieved in accordance with the Commonwealth National Principles. Changing the allocation method will focus on achieving greater horizontal fiscal equalization for Queensland local governments.

Objectives

The objectives underpinning any changes to the allocation methodology are:

Transparent
Councils understand the methodology and how their allocation is determined

Equitable
Outcomes address relative disadvantage in the current environment

Simple
Minimises complexity in the approach

Reliable
Data is consistent and obtained from trusted sources

Stable
Methodology ensure low variability of allocation outcomes

Scope

The scope of this review acknowledges that the Commission must operate within the:

Timeline

Councils informed of review

May 2021


Discussion paper released for consultation

Jun-Jul 2021


Consideration of feedback

Aug-Sep 2021


Outcomes of review advised

October 2021


Implementation

2022/23

Questions

Please note, this list will be updated as the review progresses.

  • Yes – the Commission needs to operate within the National Principles which require that 30% of the General Purpose Grant is allocated based on population. Changing the National Principles is not in the scope of this review.

  • No – the total FA Grant will continue to be indexed annually by the Commonwealth Government based on Population and CPI; and announced in the Federal Budget. All that is changing is how the QLGGC allocates Queensland’s allocation.

    The amount of the FA Grant allocation received by Queensland is not in the control of the QLGGC.

  • The early payment (or bring-forward payment) is an annual budgetary decision of the Commonwealth Government.

    This is not in the control of the QLGGC.

  • The review will investigate ways to distribute funding to councils with limited control over revenue raising options.

    The review will also investigate different ways of allocating the Identified Road Grant component, which was not reviewed in 2011, to provide less emphasis on population.

  • Subject to Commonwealth approval, the new model will be used to determine the 2022-23 FA Grant allocations.

    The implementation of the new model will likely be transitioned over a period of say 3 years, to minimise disruption to affected councils.

  • Summary of changes to QLGGC Methodology since 2011 Review

    FA Grant

    Changes made

    2011-12

    New methodology implemented

    2012-13

    No change

    2013-14

    No change

    2014-15

    Garbage changed to average per property (not per bin)

    2015-16

    No change

    2016-17

    No change

    2017-18

    Averaging of Property Valuations reduced from 10yr to 5yr

    Location Cost Adjustor – Mornington Shire Council increase from '2' to ‘3’

    2018-19

    Increased maximum Location Cost Adjustor from ‘2’ to ‘2.5’

    2019-20

    No change

    2020-21

    Increased heavy vehicle weightings as below:

    Change in Heavy Vehicle Weightings

    Class of vehicle

    Old

    New

    Car

    1 vehicle

    1 vehicle

    Light to medium trucks, two axles

    1 vehicle

    3 vehicles

    Heavy rigid and/or twin steer tandem

    2 vehicles

    4 vehicles

    Semi-trailers

    3 vehicles

    5 vehicles

    B-doubles

    4 vehicles

    6 vehicles

    Road trains

    5 vehicles

    8 vehicles

Have your say

The Commission has now released a Discussion Paper, inviting input to the review from councils and other stakeholders. Download the 2021 Methodology review – discussion paper (PDF, 427KB).

Feedback on the Discussion Paper will close on Friday 16 July 2021.

You can email any submissions, questions or concerns to QLGGC.Enquiries@dlgrma.qld.gov.au with the subject line ‘2021 Methodology review’.

Last updated: Thursday, Jun 3, 2021