The Australian Government has provided over $46 billion under the Financial Assistance Grant programme to local government since 1974–75 (including 2015–16). The grant is provided under the Local Government (Financial Assistance) Act 1995.
The Financial Assistance Grant programme consists of two components:
- a general purpose component which is distributed between the states and territories according to population (i.e. on a per capita basis), and
- an identified local road component which is distributed between the states and territories according to fixed historical shares.
Both components of the grant are untied in the hands of local government, allowing councils to spend the grants according to local priorities.
Local government grants commissions have been established in each state and the Northern Territory to recommend the distribution of the Financial Assistance Grants to local governing bodies in accordance with the Act and the National Principles for allocating grants.
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