Council finances take hit

COUNCIL coffers have taken a pounding from the federal government's cutthroat cost saving measures.

The Griffith City Council has lost a substantial amount of funding.

The Griffith City Council has lost a substantial amount of funding.

Council was already reeling from a freeze on financial assistance estimated to cost the local government between $700,000 and a million dollars, but much worse news has come to light.

Without warning the Abbott government decided to claw back the money it passes on to councils through the Financial Assistance Grant (FAG), gutting council's budget of a further $2,430,078.

Council's director of financial services Max Turner said the shock move would send plenty of councils into debt, but not his.

"We didn't have any advanced warning of either cuts so a lot of councils will be in red ink but we will break even and we're even hoping for a slight improvement by the end of the year," he said.

"In June each year we have been getting two instalments forward paid for the next year and now that's been clawed back and won't be occurring any longer.

"We've always budgeted for one full allocation which is around $4.5 million, but this year that figure will be reduced to a little over $2 million.

"Fortunately we took hard decisions in the restructuring 18 months to two years ago and the flow-on effects have really helped us and our managers stick to our budgets or under them where they can achieve savings."

Mayor John Dal Broi described the huge toll on council's bottom line as a "kick in the guts" but said he had a feeling the bad news was on the horizon.

"We always had a feeling this would happen one day and fortunately we kept a lot of the forward payments in reserve," Cr Dal Broi said.

"This blow has brought us back a fair way but we are still looking like having a balanced budget this financial year.

"Despite breaking even, we always want to keep money in reserve so this is still very worrying, but as I said we didn't waste what we were given so we will struggle through."