A COALITION win at the next Federal election will see funding bypass state governments and go directly to councils.
The policy announcement was made by Opposition spokesman on finance and debt reduction, Andrew Robb, last week at the National General Assembly of Local Government in Canberra.
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"We will continue the reforms we began between 1996 and 2007, which gave local government unprecedented recognition and direct funding to fulfil councils' core responsibilities," Mr Robb said.
"The shift toward direct funding will be part of a broader policy to place local government on a more sustainable financial footing."
Mr Robb said the Opposition would cut out the "middle man of state governments which get in the way of efficient spending at the local level".
Member for Wannon David Hawker said the policy would prevent cost-shifting by state governments to local councils and ease the pressure on them to raise council rates.
A spokesman for Federal Infrastructure, Transport, Regional Development and Local Government Minister Anthony Albanese said the minister did not disagree in principle with the direct funding concept.
However, he said there were legal questions over whether the Commonwealth could fund councils directly due to a lack of constitutional recognition.
The spokesman said Labor had previously twice attempted to reform the Constitution, but had been blocked by the conservative parties.
"We have just given local governments $250,000 to help with a public education campaign about the need for constitutional recognition (of local governments)," he said.
"So it is ironic that the Liberals and Nationals are saying this, given they opposed constitutional reform."
