By HARRY CLARKE
QUEENSLAND’S aspiring future premier has promised to address the “absolute bugbear” of local governments if elected next year, saying his failure to do so while he was a minister in the Newman Government was a major regret from his time in office.
Speaking at a business networking event hosted by the Toowoomba Chamber of Commerce, Opposition Leader David Crisafulli said longstanding rules around local councils’ asset depreciation schedule caused a significant financial burden for local governments when they set their annual budgets.
Under Queensland Treasury laws, councils must set aside money to offset the value depreciation of council-owned assets, even when the asset was provided by grants from state and federal governments.
But Crisafulli said the required cash reserves were nothing more than “funny money” that could be put to better use by councils in funding new projects or providing general local government services.
“I have one regret (from my time as Local Government Minister),” Crisafulli said.
“I didn’t force treasury to bring to the table the change to the depreciation schedule that I wanted.
“The depreciation schedule at the moment for councils is broken and, on the back of it, everyone is paying rates and being denied services for assets that would never be replaced if state and federal government money wouldn’t come in, and it is unfair on communities.
“I think that that change alone will unleash a whole lot of money that will enable you to depreciate and maintain assets that you actually have to, rather than spending funny money on things that just do not exist.”
Using the example of the $8 million redevelopment of the council-owned Roma Saleyards, Shadow Local Government Minister Ann Leahy said ratepayers were missing out on services because of money being set aside to cover the saleyards’ value depreciation.
The 2019 saleyards redevelopment was funded predominantly by state and federal government grants, however it’s the Maranoa Regional Council’s onus to account for the asset’s value deprecation.
“One hundred percent of that sits on the depreciation schedule, so the ratepayer has to fully fund the replacement of that over the life of that asset, when in reality it won’t be replaced unless there is further grant funding coming through,” Leahy (pictured) said.
“That is the challenge that every local government faces. They’re required to have asset management plans which helps them quantify the age of their assets and the time frame that they need to depreciate those over, so that they do have the cash on hand to do that replacement.
“Not all are successful in funding their depreciation and they regularly get criticised by the auditor general in that regard. That is the problem – they are required to do that. It’s been like that for a long time, and it’s time to have a look at it.”
Asked what strategy would be needed to ease the burden on council budgets, Leahy said the issue was “very complex” and a solution would be “looked at” if the LNP were to win office at next year’s Queensland Government election.
Local Government Association of Queensland chief executive officer Alison Smith, said the current asset depreciation schedule created an unfair imposition on councils and highlighted a fiscal imbalance that existed in government funding and service delivery.
“Ultimately, this shows why Queensland’s 77 councils need a fair funding increase,” Smith (pictured) said.
“Councils only receive 3 percent of all government taxation revenue – around 82 percent goes to the Federal Government, and the rest to state governments. Yet councils provide 33 percent of services – so we need a debate to ensure councils get a fairer deal.
“Every year the Queensland Auditor-General hands down a report into the finances of local government, and every year this report calls for long term funding certainty for councils.
“This year’s report showed 46 councils are at moderate to high risk of not being financially sustainable; that’s increased from 45 councils the year before.
“The cost of living pressures are being felt by everyone. So when funding to councils is cut or goes backwards without indexation – that’s a cut to community liveability.”
Deputy Premier and Minister for Local Government, Steven Miles, said the Palaszczuk Government continued to deliver “more and better funding” for council across the state, totalling more than $2.4 billion through funding and grants programs since 2015.
“We provide significant funding to councils through initiatives such as the Works for Queensland program, the South East Queensland Community Stimulus Program, the Local Government Grants and Subsidies Program, the Indigenous Councils Funding Program, the Indigenous Councils Critical Infrastructure Program, and Building our Regions,” Miles said.
“We also fund one-off, special projects such as emergency upgrades to Paroo’s Sewage Treatment Plant and upgrading water treatment infrastructure for Torres Shire.
“Our recent budget included $69.85 million for the Indigenous Council Funding Program alone.
“Our invest is assisting councils to build or maintain critical and social infrastructure, assist with operational costs, and help create and sustain local jobs.”