North Burnett Council says 2025 rates hike needed to keep it running

Qld regional councils like the North Burnett are caught in the cost of living storm and turning up the heat, raising rates to keep services alive, leaving ratepayers feeling the financial burn.

North Burnett Regional Council CEO Craig Matheson and Mayor Les Hotz are defending their expected decision to slug its residents with a “significant” rates hike, saying it had been left with no other choice to keep services running.

The leaders of a Queensland council have defended their decision to slug residents with a “significant” rates hike, saying they had been left with no other choice to keep services running.

North Burnett’s 10,500 residents have been warned to expect a “significant” rates hike in the council’s 2025 budget to be adopted on July 7, as the organisation continues to stave off the spectre of administrators amid ongoing financial troubles.

It was the latest blow for ratepayers, coming after the council handed down a 5 per cent rate hike in each of 2023 and 2024, and have warned that this year’s rate hike will be “double digits”.

Its long-term financial health has been on shaky ground for several years with the state’s audit office repeatedly rating the North Burnett Regional Council at “higher risk” of long term financial trouble since 2020.

The organisation has reported operating deficits every year, including one shortfall of more than $23 million it said was due to delays in the payment of Federal Assistance Grants, and inflation.

North Burnett Regional Council CEO Craig Matheson and Mayor Les Hotz.

The average annual shortfall in the other four years was $7.1 million.

Its last recorded operating surplus was in the 2016-17 financial year, the council’s annual reports showed.

The council was also faced with the prospect of a shrinking rates base to raise its revenue from.

Australian Bureau of Statistics data revealed the North Burnett was one of 20 Queensland council areas in which its population shrunk between 2016 and 2024.

In this period the region’s population dropped from 10,646 to 10,482.

By 2046, this number is expected to have shrunk even more, to about 9360.

In 2023, Mayor Les Hotz said the council hoped changes it was making would be enough to stave off the growing spectre of administrators being called in to run the council.

In a joint response to questions about the council’s financial stability ahead of the 2025 budget, Mr Hotz and CEO Craig Matheson said the organisation “is no different from every other household in the region”.

“We must make budget decisions in the face of rising costs, higher expenses and – in the case of (the) council – very limited sources of revenue,” they said.

North Burnett residents have been warned to expect a “significant” rates hike in the council’s 2025 budget as the organisation continues to stave off the spectre of administrators amid ongoing financial troubles.

“It (the) council is to continue to maintain its current services to the community, with a reducing workforce and further internal efficiencies, then a significant increase in all rates, utility charges and user pays fees and charges needs to occur” to have any chance at improving its situation, Mr Hotz and Mr Matheson said.

“The harsh reality is that due to inadequate Financial Assistance Grants from the Commonwealth government, coupled with insufficient rating decisions over many years, the revenue generated each year for at least the last 10 to 15 years has not kept pace with the cost to operate (the) council and deliver the facilities and services that matter most to our community”.

“Since at least 2020, revenue from rates and utility charges has grown on average at around 5.3 per cent per annum – but the cost of materials and supplies to deliver council services and facilities has grown on average at around 10.7 per cent each year.”

This had forced the council to spend its cash reserves to keep running.

Mr Hotz and Mr Matheson said the council’s financial position “cannot continue” but with “no immediate prospect” of Federal Assistance Grant funding rising from 0.5 per cent to 1 per cent of federal government revenue it “only leaves council with the option to significantly increase its rates, utility charges and user pays fees and charges to fund council services”.

The North Burnett Regional Council has reported operating deficits every year since 2020, including one shortfall of more than $23 million it said was due to delays in the payment of Federal Assistance Grants, and inflation.

Queensland councils and their peak body, the Local Government Association of Queensland, have been calling for an increase to the FA Grants amid continued concern councils were being asked to cover the cost of more and more services.

In an open letter published in February the LGAQ said Queensland councils “maintain community infrastructure worth $150 billion, 153,000km of local roads, 53,000ha of parks and playgrounds, 2800 bridges, and $25 billion in water and wastewater assets including 314 water treatment plants and 76,000km of water and sewer mains”.

“And they do it with just three cents in every $1 of taxation,” the LGAQ said.

They said at the grant’s original inception the grant scheme accounted for 1 per cent of the nation’s revenue, but over the years the proportion has shrunk despite it being tied to CPI and population growth.

The national peak body for council’s, the Australian Local Government Association, said the last time the funding was equivalent to 1 per cent was 1996.

The grant program has not been tied to federal tax revenue since 1986.

Australian Bureau of Statistics data revealed the North Burnett was one of 20 Queensland council areas in which its population shrunk from 2016 to 2024. This was expected to drop further by 2046. Photo Noel Thompson / Central & North Burnett Times

A federal Department of Infrastructure program spokesman said since 1974 the federal government “has invested over $70 billion to local governments through the Commonwealth’s Financial Assistance Grant Program (FA Grant) alone”.

“The Government also supports local governments through other programs such as the Local Roads and Community Infrastructure Program, the Roads to Recovery Program and the Growing Regions Program.”

He said the FA Grant scheme was “indexed annually in line with CPI and population growth” and as a result “it only increases and never decreases”.

“A Parliamentary Inquiry into the Financial Sustainability of Local Government was announced on the 21 March 2024, which will provide an opportunity for all perspectives on issues impacting the sector to be heard, including worker security, financial sustainability and cost shifting.”

A Queensland Department of Local Government spokeswoman did not answer questions about at what point councils were risk of being placed into administration.

“Our understanding is that (North Burnett Regional) Council is also considering other measures to improve financial sustainability while continuing to deliver essential services to the community,” he said.

The state government was committed to helping its councils in their push “for a better funding deal for Queensland councils, including funding provided under the FA Grant”.