Greg Hallam is concerned about growing pressures on council budgets.
Greg Hallam is concerned about growing pressures on council budgets.

Councils facing choice between higher rates or cutbacks

COUNCILS will struggle to maintain financial sustainability in the face of declining government funding and a renewed push for ratepayer-supported subsidies for development.

Local Government Association of Queensland CEO Greg Hallam said a report by Auditor-General Andrew Greaves into the accounts of 68 local authorities governments in Queensland highlighted the financial challenges councils now faced.

He said decisions by the previous Labor government, including withdrawal of state government subsidies, had hit council finances and forced an increase in local government borrowing to maintain services.

"Those decisions have caused councils to lose about $850 million in revenue each year," he said.

"For many councils that has meant a choice between maintaining services and infrastructure through borrowing and increased rates, or cutting back on services."

Mr Hallam said many councils were trying to operate more efficiently by reducing their labour costs while encouraging economic growth in their regions through programs to fast-track building development approvals.

He said in negotiating any changes to the state's infrastructure charging regime, the Newman government needed to recognise the work councils were doing to encourage development.

"What is definitely not needed in this climate is a move to further force councils to subsidise residential and commercial development by reducing their ability to ensure the property industry pays its fair share of infrastructure costs."

Mr Hallam last week labelled subsidies and discounts to the industry as welfare, akin to payments to single mothers, indigenous Australians and the unemployed, because all drew on the public purse.

His comments came after the state government chose an Urban Development Institute of Australia function in Brisbane to announce a Planning Healthcheck pilot project, to review infrastructure charging regimes that Deputy Premier Jeff Seeney labelled as "gold-plating" and "excessive" in some cases.



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