Liverpool City Council has welcomed the Local Government Grants Commission’s decision to retain the existing methodology for distributing Financial Assistance Grants, following widespread opposition from councils across Australia.

Mayor Ned Mannoun said Liverpool Council was proud to have stood firmly against the proposed changes, which risked reducing funding for growing communities already under significant pressure to deliver essential infrastructure and services.

“The Commission has listened to local government, and we thank it for recognising the strength of the concerns raised by councils and peak bodies,” Mayor Mannoun said.

“The result speaks for itself. Of the 102 councils that made submissions, just 10 supported the proposed methodology, while 54 raised significant concerns or sought modifications, and 38 opposed the changes outright.

“This was a clear message from the sector that the proposed approach needed to be reconsidered.

“Liverpool Council made its position clear because we have a responsibility to stand up for our residents. Communities across Southwest Sydney are absorbing the pressures of population growth, housing policy and increasing demand for local infrastructure and services. Reducing financial assistance to councils facing these challenges would have made an already difficult task even harder.

“Financial Assistance Grants are an important source of funding that helps councils maintain services and respond to the needs of their communities.

“We are proud to have contributed to this outcome and thank the Commission for listening. The focus must now remain on ensuring funding arrangements recognise the real and growing needs of local communities.”

BACKGROUND

The NSW Local Government Grants Commission proposed a change its methodology for distributing Commonwealth Financial Assistance Grants (FA Grants) to local councils.

Liverpool City Council said the proposed formula failed to properly take into consideration the costs of supporting a fast-growing community, maintaining ageing infrastructure and providing services to a major regional centre.

The key concerns are:

• Population growth: Liverpool’s population reached an estimated 261,231 in June 2025, growing at 2.3 per cent annually, compared with 1.35 per cent across Greater Sydney. The formula did not adequately account for the cost of providing new infrastructure and services ahead of growth.
• Roads and traffic: The proposed formula would have cut Liverpool’s local roads funding by approximately $1.38 million a year, despite more than 40 kilometres of Council-managed roads being classified as in very poor condition. It failed to properly account for traffic volumes, heavy vehicles, road condition and growing freight movements.
• Social housing and rate-exempt properties: Liverpool has approximately 5,300 social housing dwellings owned by Homes NSW, plus around 550 managed by community housing providers. The proposed formula did not adequately recognise the cost of providing services to communities where some properties do not generate council rates.
• Household capacity to pay: With 19.8 per cent of households earning less than $800 a week, Council argued that household income alone did not reflect its practical ability to raise revenue, particularly under NSW rate-pegging restrictions.
• Regional services: Liverpool provides health, education, employment, transport and community facilities serving people from across South Western Sydney. The formula did not fully recognise the costs of supporting people who live, work, study or access services in Liverpool without residing in the local government area.
• Growing infrastructure costs: New roads, drainage, parks, sporting fields and community facilities create ongoing maintenance and replacement costs. The formula did not adequately account for the long-term financial burden of these growing assets.
• Environmental obligations: Contaminated land, legacy industrial sites and other environmental issues create significant investigation, remediation and compliance costs that compete with funding for everyday services.
• Major Commonwealth infrastructure: Facilities including Holsworthy Military Barracks, the National Intermodal Corporation precinct and Western Sydney International Airport generate demands on local roads and supporting infrastructure that are not necessarily matched by council rates revenue.
• Restricted grants: The proposed formula risked overstating revenue capacity if it did not distinguish between unrestricted income and grants tied to specific projects or services.

The financial impact on Liverpool

Under the proposed formula, Liverpool’s annual Financial Assistance Grant would have fallen from $10.28 million to $8.47 million, a reduction of $1.81 million or 17.6 per cent.

Overall, Financial Assistance Grants have declined from approximately 1 per cent of Commonwealth taxation revenue in 1996 to around 0.49 per cent in 2026–27.