Tuesday, October 23, 2012

We'll all be rooned by debt ..... again?

The retiring LGAQ President Paul Bell has warned on the rising dangers of local government debt which he claims could result in large rate increases: Council rates could balloon due to debt.
He said aggregated council expenditure has been rising by $8 billion a year, with the cost of providing water, sewerage and drains increasing.

The impact of decisions by the former Bligh state government also robbed councils of about $900 million in revenue and council debt had trebled over the past four years from $1.8 billion to $5.3 billion.

"If we stick to our current path, council debt will increase by around a billion dollars a year to an entirely unsustainable $23 billion by 2031," he said.
Council debts are listed in the QTC Annual Report 2012 (page 69). Most of the debt increase in the past year can be attributed to Brisbane, presumably related mostly to their infrastructure spending and floods, and now accounts for about a third of total council debt in queensland. Cairns has maintained modest debt compared with other centres:

Brisbane:  $1,828 million
Gold Coast:  $812 million
Townsville: $419 million
Ipswich:  $415 million
Sunshine Coast: $254 million
Rockhampton: $236 million
Mackay:  $229 million
Toowoomba: $163 million
Gladstone: $159 million  
Cairns: $105 million

Bell's suggested cost efficiences included joint tendering, where local preferencing often becomes a media issue causing councillors unease, such as with the imported bridge from Germany. I'm far from convinced also on the wisdom on reversing council amalgamations.

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