Overcoming obstacles for future growth
June 15, 2017
It’s been just two days since the State released their budget. For the North Burnett there was nothing earth shattering in there but we will continue to work on this into the future. It’s interesting to note however that out of all the money the State and Commonwealth collects in taxes and fees, Local Government receives a share of only 3%.
Last year the Queensland Audit Office released a report on the sustainability of Queensland Councils after continually observing around 50% of QLD councils spending more each year than they earn. This of course is not good news for the general household budget let alone a government budget. So what are the options available to local government to rectify this situation?
- We can decrease our expenses. This of course comes at a price; we either decrease our service levels or our workforce, OR;
- We can increase our own-source revenue. This is where the disparity between smaller and larger councils mainly occurs. There are significantly different capacities for councils to have control over their own long-term financial futures. Many of the larger councils with much larger rateable bases also have options for local governments owning, investing in and/or operating commercial, revenue-raising ventures. These larger councils have own-source revenue over 70%, whilst many smaller councils like ourselves have own-source revenue ratios below 40% (ours is 49.39%).
In order for us to be considered more sustainable we need to achieve an operating surplus and we have been given a suggested course of action to achieve this (a continual rising of rates 5% a year, every year to be precise). This is not only unpalatable to your elected council, it is not even aimed at solving the problem. Even with a 100% rate rise we still couldn’t fully fund ourselves into the future due to our low rate base, excessive amount of infrastructure (we have the 5th largest road network in QLD) and our flat growth rate.
As a small regional council we are clearly and publicly judged alongside other councils who don’t share our issues or concerns. We are judged by the same parameters that a Gold Coast or Toowoomba council are. State and Commonwealth Governments’ can not continue to force a one size fits all model onto local government and instead need to work with local governments to help them overcome these obstacles to future growth. We have felt so strongly about this that we wrote a submission to the inquiry into the long-term financial sustainability of local governments and have since been invited to attend a parliamentary hearing on the matter next week 23rd June. Stay tuned.