Wollongong Lord Mayor Tania Brown has called an administrative overhaul that could strip $16.1 million annually from the council’s budget a “kick in the teeth”.
Cr Brown warned that should draft methodology changes by the NSW Local Government Grants Commission (LGGC) be adopted, service and infrastructure cuts across the Illawarra will follow.
Under modelling released by the LGGC, Wollongong’s annual share of federal Financial Assistance Grants would drop by 67.5 per cent, collapsing from $23.8m to just $7.7m annually starting July 1, 2027.
These figures are not yet locked in but Cr Brown was blunt in her assessment of the prospective cut, declaring it “an unfathomable blow to the city”.
“What the hell, frankly?” Cr Brown said. “When you had $23.8m and they cut you to $7.7m, that’s a kick in the teeth,” Cr Brown warned, pointing out that neighboring councils like Kiama and Wingecarribee face $2m to $3m annual slashes despite already operating under state financial performance orders.
Cr Brown escalated the funding crisis directly in discussions with Premier Chris Minns last week, demanding the State Government intervene. At tonight’s meeting, she will move an urgent Mayoral Minute directing council to write to Premier Minns, Local Government Minister Ron Hoenig, and local state MPs to strongly oppose the proposal in the “strongest of terms”.
She is also calling an extraordinary council meeting before the state consultation window closes on Friday, October 9, 2026.
Potential cuts
Wollongong: $23.8 million to $7.7 million per annum (-67.7%)
Central Coast: $32m to $12m (-62.5%)
Newcastle: $15.5m to $6.1m (-60.7%)
Lake Macquarie: $21m to $13.8m (-34.8%)
MidCoast Council: $24m to $18m (-25%)
November budget process derailed
The timing of the consultation modelling is particularly critical as the council begins its internal budget work every November before adopting its operational budget in June or July.
A recurring $16.1m annual revenue drop directly undermines council’s long-term framework, Cr Brown argued, including its Draft Delivery Program 2025–2029 and Operational Plan 2026–2027, which rely on predictable untied revenue.
“They want us to plan everything on four-year cycles, and this is to start next year,” Cr Brown said. “On a budget that we had already done forecasts over four years - and this is $16 million every year, not a once-off.
“We have to seriously have a conversation with our community ... on what am I closing? What services? What infrastructure are we not going to be able to deliver?”
The coastal infrastructure burden
Financial Assistance Grants give councils money they can spend where it is needed, unlike disaster recovery grants, which are tied to repairing damage caused by a particular storm or disaster. That means Wollongong can use the funding for preventative work, such as clearing drainage culverts before heavy weather hits, rather than waiting for the damage to happen.
Cr Brown said Wollongong was effectively “the beach for Western Sydney”, carrying the cost of maintaining infrastructure used by large numbers of visitors who do not live or pay rates in the city.
The council maintains 35 local beaches and patrols 17 of them. Its latest budget also includes $4 million for urgent coastal protection works at Windang, around Lake Illawarra.
Why the change?
The Local Government Grants Commission (LGGC) has released a draft funding methodology for consultation after concerns were raised about issues including the use of outdated data.
The proposed model measures councils’ rate-raising capacity against property values: the higher the capacity, the lower the grant allocations.
Four councils north of Wollongong have joined forces to oppose the changes, warning they would divert more than $33 million from their communities next year alone.
Central Coast, Newcastle, Lake Macquarie and MidCoast councils have called on the NSW Government to pause the changes until the Federal Government’s commitment to increase Financial Assistance Grant funding is implemented.
“No council in NSW should be worse off simply to prop up another council who is struggling financially,” the councils said in a joint statement.
