MARANOA Regional Council stands to lose more than $6 million in federal funding by the end of 2016 if the indexation of Financial Assistance Grants remains frozen.

Mayor Robert Loughnan said the Federal Government must unfreeze the indexation of the FAGs, which were frozen in the 2014 budget as a cost-cutting measure.

The council agreed to support the position of the Australian Local Government Association and Local Government Association of Queensland on the issue at their latest meeting on Wednesday.

Cr Loughnan said they would send a letter to Maranoa MP Bruce Scott about the indexation freeze, which he said will hurt regional councils like MRC in the long run.

"It will essentially mean we'll be losing about $6 million and all we know is we're 3% worse off every year for the next three years," he said.

"It's really hard to repay that funding and it makes budget time really difficult.

"The FAGs are vital to regional local governments and they are aimed at rural councils that find it more expensive to provide services to the community."

Cr Loughnan said while a lot of the funding was based on the discretion of the council, a lot of the funding goes towards road maintenance.

WHAT do you think about this issue? Let us know by emailing editorial@westernstarnews.com.