The Local Government Grants Commission is an independent body that distributes funding from the Commonwealth Government across South Australian councils to ensure they can provide a similar level of service to their communities.
To do this, the Local Government Grants Commission receives extensive information from all councils every year.
More information about how the Local Government Grants Commission works is available on the Attorney-General's Department website.
You might notice the information on Councils in Focus does not include the most recent financial year.
This is because the information councils provide to the Local Government Grants Commission largely comes from councils’ audited financial statements, which are usually completed by councils in November each year.
Once the Local Government Grants Commission receives this information from all South Australian councils, it then spends some time checking it to make sure the data is consistent and accurate.
The annual business plan is a statement of each council’s intended programs and outcomes for each financial year. It links longer-term planning with the allocation of resources in that year’s budget.
The annual business plan also includes the rating policy for each year – how the councils’ rates will be distributed across its ratepayers.
The two documents are closely related and some councils choose to combine them into a consolidated document.
Councils must adopt their annual business plans and budgets by August each year.
Before this, councils must consult with their communities. If you are interested in your council’s decisions around rates and spending on services, this is a good time to engage with your council.
A long-term financial plan outlines the activities councils want to undertake over the medium to longer term to achieve their stated objectives. It shows what a council expects its financial performance and position to be over a 10-year period, and identifies significant costs to help councils plan for these in advance.
An infrastructure and asset management plan should predict a council’s need to pay for new infrastructure, renewal of existing infrastructure, and required maintenance. This is very important for councils as a lot of their expenditure needs are on infrastructure. Knowing what these needs are for at least a 10-year period is critical to a council’s long-term financial planning.
One aspect of councils’ finances that receives a lot of public attention is their level of debt.
Ratepayers can be understandably concerned if their council appears to have a high level of debt. However, a well-managed council is likely to have some level of debt from time to time.
Borrowing money can allow councils to:
- fund new assets that are needed
- renew existing assets
- fund asset maintenance in circumstances where an investment now can avoid a larger expense later.
Importantly, councils who borrow money where necessary to make capital investments help prevent large rate increases in the shorter term to fund any long-term asset. Borrowing money and sharing the cost across the length of an asset’s lifetimes ensures ‘intergenerational equity’—that is, current ratepayers are not paying the costs of assets that will benefit ratepayers over several years.
See net financial liabilities for more information.
If you are concerned about borrowings that your council has undertaken, contact your council to discuss your concerns.
You may also like to look at the long-term financial plan included in your council’s strategic management plan to understand how it plans to manage its liabilities over a ten-year period. This should be available on your council’s website.
In recent years the Federal Government has ‘brought forward’ part of each council’s Financial Assistance Grants (FA Grants) to give them to councils before the start of the financial year when they would normally receive them.
For example, councils received 50% of their 2021-22 FA Grants in June 2021 (which is in the 2020-21 financial year).
The reports on this website correct for any distortion that these early payments could have on councils’ key financial indicators, so that they can be more easily understood and accurately compared.