Council shortchanged by $10M

The Federal Government reduced the amount of funding it gave Central Coast Council in advance of the new financial year by $10M.

While Council will likely get the $10M this financial year, it means last financial year’s surplus won’t be as much as predicted.

For the financial year (FY) 2024/25, Council budgeted to receive $31.5M of the annual Financial Assistance Grant (FAG).

This was based on the assumption that Council would receive 85% of the FY2025/26 estimated grant entitlement in the FY2024/25, in line with the previous financial year’s prepaid amount.

But, on June 24, Council received $16.6M, which equates to about 50% of the entitlement.

The total Financial Assistance Grant payments received in FY2024/25 was $21.4M, resulting in the $10.1M shortfall to the budget.

“It is noted that the total amount budgeted to be received in FY2025/26 will consequently need to be reviewed as part of future Quarterly Operational and Budget Reviews,” Council said.

The payments of untied grants to local councils were introduced by the Late Gough Whitlam’s Labor Government in 1975.

It was originally about 1% of the federal revenue – and paid in four equal instalments through the year.

Then 20 years ago the federal government made two payments of the FAG grant in one year, with the second being a prepayment of the next year’s grant.

So in essence councils got that year’s money and also their next year’s money, early.

But In 2024 the federal government reduced the amount of the prepayment by 15%

And in the year just completed, they reduced it by another 35%

Also, over the years, the FAG has reduced from being 1 % to more like 0.5% of federal revenue.

The state associations of councils and the national association continue to campaign to try to get the amount back up to the 1% mark.

The FAG update was tabled at the July 22 Council meeting.

The report said the 2024/25 Draft Financial Statements would be ready to be presented to the September 2025 Council meeting.

“At the time of writing this report, various end of financial year adjustments were yet to be calculated and processed. At this stage of the end of financial year process, it is not possible to ascertain the estimated operating surplus,” the report stated.

“However, based on amounts already processed, as at July 14, 2025, it is anticipated that the FY2024/25 operating result will be within an acceptable variance of the FY2024/25 Adopted Budget.
“The outstanding transactions predominantly relate to expenditure.”

Council said further adjustments may also be requested as part of the audit of the FY2024/25 Annual Financial Statements by the NSW Audit Office.

Council’s July investment report shows Council has cash and investments totalling $872.5M.

Merilyn Vale