New report: More than half of Qld councils in deficit

More than half of Queensland’s local council are spending more than what they earn, with a staggering number at a high risk of being financially unsustainable. SEE THE FULL LIST

More than half the state’s local governments are spending more than what they earn as a new report reveals the financial sustainability of Queensland councils is still below pre-pandemic levels.

In his latest report, Auditor-General Brendan Worrall has warned 22 councils are at high risk of not being financially sustainable, while 23 are at a moderate risk.

The figures are an improvement from the previous year, when councils were battling low cash flows and extra costs amid the Covid crisis – but are still below pre-pandemic levels.

Auditor-General Brendan Worrall. Picture: NCA NewsWire / Jono Searle

There were 35 councils that generated an operating surplus in 2020-21 – up from 21 the year prior, as 42 councils, or more than half across the state, reported a deficit.

The Auditor-General also found there were 11 councils as of June 30 last year that had “inadequate cash reserves” – putting them at risk of being unable to meet unforeseen expenses.

Mr Worrall noted the additional costs carried by regional councils to service their communities, such as running airports and operating childcare centres, was making it difficult for them to be financially sustainable.

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He also suggested Queensland’s smaller population in comparison to NSW and Victoria meant the state’s councils had less ability to generate revenue from general rates.

“Having a low revenue base and a large infrastructure asset base to maintain adds significant financial pressure to councils in Queensland,” Mr Worrall wrote.

He took aim at how long councils were taking to get their financial statements certified – saying only 36 had their statements certified two weeks before their deadline in 2020-21, down from 47 the year before.

Opposition local government spokeswoman Ann Leahy called on the state government to restore Works for Queensland funding to $100m per year to help councils.

Deputy Premier Steven Miles speaking during parliament. Picture: Tara Croser.

But Deputy Premier Steven Miles insisted the government had delivered an extra $250m – on top of existing Works for Queensland funding – to support councils as they responded to Covid.

Local Government Association of Queensland chief executive Alison Smith said in a decentralised state like Queensland, councils do “so much more” – such as aged care and child care.

“Queensland councils do this because they fundamentally believe that every Queensland community contributes to the economic and social fabric of this state, be they rural, remote, regional or urban,” she said.

She suggested it was “critical” Works for Queensland was restored to $100m per year, and that Federal Assistance Grants be at least one per cent of federal taxation revenue.