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The federal budget has created a multimillion-dollar hole for Wollongong City Council, according to Lord Mayor Gordon Bradbery.

The council placed its own budget on public exhibition last month, after a long process of exploring ways to plug what was a $21 million revenue gap. It was plugged through a rate rise and some minor shaving of services.

But Tuesday night's budget has left the council with another $3 million shortfall to fill.

Cr Bradbery said the federal budget included a freeze on indexation increases of federal assistance grants over the next three years. It would cost council $500,000 in the first year, $1 million in the second and $1.5 million in the third - a total hit of $3 million.

"In our forward estimates, we were banking on having that sort of indexation included with the federal assistance grants but it will be flatlining now," Cr Bradbery said. "That will really affect us and we'll have to look at ways in which we can find some offsets and manage that situation."

He ruled out making changes to the council's budget but admitted things were now a bit tighter.

"It'll be a tight situation, the budget will probably remain as it is but what wiggle room we had is gone."

Wollongong Lord Mayor Gordon Bradbery. Picture: ANDY ZAKELI

Wollongong Lord Mayor Gordon Bradbery. Picture: ANDY ZAKELI