Councils are borrowing record amounts to get the economy moving
Councils are borrowing millions from the banks to help build infrastructure and spark their local economies. See some of the projects they are building.
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Councils are borrowing record levels of cash to stimulate local economies, new figures show.
Data from the Local Government Finance Authority, effectively the sector’s bank in South Australia, shows outstanding loans to councils at the end of June totalled $942m.
It is the highest level on record for the sector, and $66m more than the same point in 2019.
In July, the authority lowered its standard variable interest rate from 2.2 per cent to 1.45 per cent on new loans to bring forward infrastructure renewal or to fund operating activities.
LGA Procurement – the body which councils use to buy goods and services – has also reported a surge in activity. It said the value of quotations in August was up 48 per cent on the year before.
The Local Government Association of SA said the latest figures were clear evidence councils were “rolling up their sleeves” to support the economic recovery in their communities.
Association president Sam Telfer said councils had a raft of new projects on the drawing board including:
AN ATHLETICS centre at Bridgestone Reserve, Salisbury;
REDEVELOPMENT of Unley Oval and Millswood Croquet Club;
STREET and park upgrades in the Port Adelaide Enfield Council area;
UPGRADES to Woodville Hockey Club;
MAJOR road upgrades in Moonta Bay, on the Copper Coast, and;
REBUILDING the boat ramp at Streaky Bay.
Mr Telfer said bringing forward infrastructure projects was one of the best ways council could support local economies.
“Investing in these projects provides an immediate economic boost, as well as long-lasting benefits to the amenity of our streets and suburbs and the wellbeing of our communities,” he said.
Councils have been in a stoush with the State Government and Business SA over relief throughout the COVID pandemic.
In July, former local government minister Stephan Knoll released modelling which indicated councils reaped $18.7m more in rates during the 2019-20 financial year than they would have if rises were kept to inflation.
Business SA boss Martin Haese has also called for greater rates relief.