Treasury deliver de-merger blow

The Queensland Treasury Corporation has poured cold water over a proposed de-amalgamation of the Southern Downs, alleging it's 'not financially viable'.

Public rally to support de-amalgamation. There's another planned rally for April 28, again at CF White. Picture: Contributed

THE Queensland Treasury Corporation has poured cold water over a proposed de-amalgamation of the Southern Downs, with their analysis alleging it would 'not be financially viable'.

Southern Downs Regional Council formally received QTC's financial analysis of the proposed de-amalgamation at a special council meeting today.

Councillors will now consider QTC's report before making a decision on whether they support the Granite Belt Community Association's push for de-amalgamation at council's April 30 general meeting.

"It is important all residents take the time to read QTC's report and work out for themselves the consequences of de-amalgamation on their individual household, their community and for the region as a whole,” an SDRC spokesperson said.

"Based on QTC's Financial Analysis, the proposed de-amalgamation of the new Granite Belt Regional Council from SDRC is not financially viable unless significant increases in rates and utility charges are absorbed by the Granite Belt community.

"QTC has taken into account the existing financial circumstances of the existing SDRC and how this would change if de-amalgamation was to occur. While financial impacts on the remaining SDRC will be minimal, there are likely to be lost opportunities for the region due to the cost de-amalgamation would have on the community as a whole.

"The annual increase in rates for the remaining SDRC area is forecasted to remain at 3 per cent, but could be less, as is the case this financial year at 2per cent.

"For the new GBRC, de-amalgamation will come at a significant cost to ratepayers in the previous Stanthorpe Shire Council area. Currently, the average rates amount in the Granite Belt is $2,526 and is forecast to be $2,602 in 2019-20 without a de-amalgamation.

"If de-amalgamation was to occur, average rates in the first year are expected to rise by 82 per cent to $4726, reducing to $3,948 in the second year following de-amalgamation (including the expected 3% annual increase). Rates will increase to $4052 and then $4,158 in subsequent years.

"QTC's report indicates that the major contributors to the increased costs that are absorbed in the increased rates are due to the once-off costs associated with de-amalgamation and higher ongoing costs for staffing and information communication technology costs.

"There is very few of these costs that can be avoided as part of de-amalgamation, and in the process of establishing a new local government authority. De-amalgamation will have a greater impact on Stanthorpe and its surrounding areas due to its existing low rate base.

"The financial analysis undertaken by QTC is comprehensive. It makes comparisons with other Queensland councils in relation to the number of staff, the size of the areas managed and the number of elected representatives,” the spokesperson said.

Despite QTC's financial estimations, they haven't always got it right.

When Noosa Shire Council split from the Sunshine Coast, QTC put an $11,000,000 cost on the de-merger.

In the end it cost $4.3 million. The final costs of de-amalgamations in Mareeba, Livingstone and Douglas LGA's again ended up being significantly lower than QTC projected.

Southern Downs Regional Council will hold a press conference in Warwick tomorrow at 11am to discuss the findings.

To review a copy of the QTC Financial Analysis and all information regarding proposed de-amalgamation, visit sdrc.qld.gov.au/de-amalgamation or pick up a hard copy from any of SDRC's Community Contact Centres.