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Australia has three levels of government that work together to provide services to its citizens. Local governments in Australia are generally run by a council, with council board members referred to as councillors and the head councillor called the mayor or shire president. Local governments receive part of their income in grants from federal, state, and territory executive governments, as well as from local taxes and fees. The federal government has also provided financial assistance grants to local governments under the Local Government (Financial Assistance) Act 1995.
| Characteristics | Values |
|---|---|
| Level of government | Local councils |
| Number of local councils | 547 as of August 2016 |
| Funding sources | Federal, state, and territory governments |
| Funding type | Grants, local taxes |
| Local taxes include | Property tax, sewerage and water charges, dog licences, user fees for sporting facilities and libraries |
| Federal funding | Federal grants make up about half of the states' total revenue |
| Federal grants since 1974-75 | Over $70 billion |
| Federal grants for 2024-25 | Almost $3.3 billion |
| Federal grants distribution | Quarterly instalments to state and territory governments |
| Federal grants usage | General purpose, local road construction |
| Federal grants flexibility | Untied, allowing councils to spend according to local priorities |
| Federal grants allocation | Based on population and fixed historical shares |
| Supervision of local councils | State governments |
| Powers | Very limited legislative powers, no judicial powers |
| Functions | Managing public services and land use at the community level |
| Number of local governments in Victoria | 78 |
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What You'll Learn
Federal government funding
Australia has three levels of government that work together to provide services to its people. The federal government interacts with local councils by providing federal grants to help fund local government-managed projects. Local governments receive part of their income in grants from federal, state, and territory executive governments.
The Australian Government contributes to the prosperity of the economy and the well-being of all Australians by assisting local governments in managing their own futures, including providing essential services and developing effective planning initiatives. The Commonwealth provides financial assistance grants to local governments under the Local Government (Financial Assistance) Act 1995. The National Awards for Local Government recognize, reward, and promote the innovative work of local governments across Australia.
The Federal government has provided over $70 billion under the Financial Assistance Grant program to local governments since 1974–75 (including 2024–25). The grant is provided under the Local Government (Financial Assistance) Act 1995 and consists of two components: a general-purpose component distributed among the states and territories according to population (i.e., on a per capita basis), and an identified local road component distributed according to fixed historical shares. The grant is paid in quarterly installments to state and territory governments for immediate distribution to local governing bodies. The quantum of the grant pool changes annually in line with changes in population and the Consumer Price Index.
Federal funding grants make up about half of the states' total revenue. Under Section 96 of the Constitution, the federal Parliament can 'grant financial assistance to any State on such terms and conditions as Parliament thinks fit'. This allows the federal government to give 'tied' grants to state governments, directing the state government on how to spend the money. The federal government can then influence the way things are done in areas such as education, health, housing, and transport, which are primarily state responsibilities.
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State government funding
Australia has three levels of government that work together to provide services to its citizens. These are the federal parliament, the state/territory parliaments, and the local councils.
Local government in Australia is generally run by a council, and its territory of public administration is referred to as the local government area or LGA. The council board members are generally known as councillors, and the head councillor is called the mayor or shire president. As of August 2016, there were 547 local councils in Australia.
Local councils receive part of their income in grants from federal, state, and territory executive governments. The federal government provides financial assistance grants to local governments under the Local Government (Financial Assistance) Act 1995. The grants consist of two components: a general-purpose component distributed per capita, and a local road component distributed according to fixed historical shares. The local governments can spend the grants according to local priorities.
Additionally, councils raise their own money from local taxes such as property tax, sewerage and water charges, dog licences, and user fees for sporting facilities and libraries.
The Australian Capital Territory (ACT) has no municipalities. The ACT government is responsible for both state-level and local-level matters. The ACT Government directorate Transport Canberra & City Services handles responsibilities that are under the purview of local government in other parts of Australia, such as local road maintenance, libraries, and waste collection.
Federal funding grants make up about half of the states' total revenue. Under Section 96 of the Constitution, the federal parliament can 'grant financial assistance to any State on such terms and conditions as Parliament thinks fit'. This allows the federal government to direct the state government on how to spend the money in areas like education, health, housing, and transport.
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Local taxes
Local councils in Australia raise their own money through local taxes. These include rates, which are taxes on the value of property, as well as sewerage and water charges, dog licences, and user fees for sporting facilities and libraries.
Local government in Australia is generally run by a council, and its territory of public administration is referred to as the local government area or LGA. Each LGA encompasses multiple suburbs or localities, often with different postcodes. As of August 2016, there were 547 local councils in Australia.
The Australian Capital Territory (ACT) has no municipalities. The ACT government is responsible for both state-level and local-level matters. The ACT Government directorate Transport Canberra & City Services handles responsibilities that are under the purview of local government in other parts of Australia, such as local road maintenance, libraries and waste collection.
The Australian government also provides financial assistance grants to local governments under the Local Government (Financial Assistance) Act 1995. The grants are distributed on a per capita basis and according to fixed historical shares. The grants are untied, allowing councils to spend the money according to local priorities.
Federal funding grants make up about half of the states' total revenue. Under Section 96 of the Constitution, the federal parliament can "grant financial assistance to any State on such terms and conditions as Parliament thinks fit". This allows the federal government to direct state governments on how to spend the money, thereby influencing areas such as education, health, housing and transport.
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Council funding distribution
Local government in Australia is generally run by a council, and its territory of public administration is referred to as the local government area or LGA. As of August 2016, there were 547 local councils in Australia. Councils raise their own money from local taxes such as property tax, sewerage and water charges, dog licences and user fees for sporting facilities and libraries.
The three levels of government in Australia—federal, state and territory, and local—work together to provide services to the people. Local governments receive part of their income in grants from federal, state and territory executive governments. Federal funding grants make up about half of the states' total revenue. Under Section 96 of the Constitution, the federal parliament can 'grant financial assistance to any State on such terms and conditions as Parliament thinks fit'.
The Australian Government has provided funding under the Financial Assistance Grant program to local governments since 1974–75. The grant is provided under the Local Government (Financial Assistance) Act 1995. The grant is paid in quarterly instalments to state and territory governments for immediate distribution to local governing bodies. The grant 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 a local road component distributed according to fixed historical shares. Both components are untied, allowing councils to spend the grants according to local priorities.
The Australian Capital Territory (ACT) has no municipalities. The ACT government is responsible for both state-level and local-level matters. Many Canberra districts have community organisations called "community councils", but these are not part of the government, though they generally receive government funding.
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Community organisations
One of the primary ways community organisations contribute to local government funding is through grants and funding programs. Many community organisations actively seek grants from various sources, including
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Frequently asked questions
Local governments in Australia receive funding from federal, state, and territory executive governments in the form of grants. They also raise funds independently through local taxes such as property tax, sewerage and water charges, dog licences, and user fees for sporting facilities and libraries.
Local governments in Australia have limited legislative powers and no judicial powers. They are subject to the exclusive jurisdiction of the state or territory they belong to. Local councils manage public services and land use at the community level, including local road maintenance, libraries, and waste collection.
As of August 2016, there were 547 local councils in Australia. These councils are the primary law-making bodies for their respective regions or districts.
Federal grants make up about half of the states' total revenue. While the federal government cannot provide funding directly to local governments, it can influence local affairs by providing grants to state governments with conditions on how the money should be spent. This allows the federal government to influence areas such as education, health, housing, and transport.
