Sunshine Coast Council’s $634m debt to be cut as final airport runway payment due

Sunshine Coast Council is expected to slash debt by almost a quarter within the next 12 months, but that forecast hinges on one crucial payment.

Mayor Mark Jamieson said Sunshine Coast Council's debt would reduce by more than $400 million in 2022 after Palisade Investment Partners made its final payment for the airport runway project.

Sunshine Coast Council’s forecast to slash its debt by almost a quarter hinges on the payment of $305 million for the new airport runway due next year.

Mayor Mark Jamieson said the council was in a strong financial position as the council adopted its $816 million budget for 2021-22.

When asked what council’s current debt was, Mr Jamieson flicked through his notes before he declared it would peak at $634 million within the next 12 months.

He said it would reduce to $483 million at the end of the 2021-22 financial year, when the council received $305 million from airport operator Palisade Investment Partners.

“What’s important to understand is the council’s investment in the airport, the city centre, solar farm and the international broadband cable sets our region up for a strong economic future,” Mr Jamieson said.

“That comes at a cost, but that cost will be reduced by about $305 million in 12 months time.”

Mr Jamieson said returning the budget to a forecast $18.8 million surplus and paying down debt were high priorities.

Palisade Investment Partners is due to make its final payment next year as part of a $372m deal for the construction of the 2450m runway.

Under the agreement the company will ultimately pay more than the $334 million the council spent on the project.

According to the budget agenda document, the final payment will settle council’s outstanding debt relating to the project and provide a $31 million windfall.

Council’s debt also includes money spent on the Maroochydore city centre, estimated to be about $186 million.

The majority of the costs, $64 million, went towards infrastructure expenses, followed by $59 million on land acquisition, $29 million on finance costs, $22 million on design and marketing and $12 million on development management fees.

The council received $19 million of revenue through land sales and infrastructure charges.

Last year the council signed a deal for Walker Corporation to take on exclusive development rights at the CBD – including funding infrastructure.

The report said because council no longer had the “significant expense” of funding infrastructure, it removed $100 million in “new debt” that was previously forecast to 2030.

It said funds received through the Maroochydore city centre development agreement would be used to reduce existing debt relating to the project.

Finance portfolio councillor Ted Hungerford said the Queensland Treasury Corporation again rated the council as having a strong financial sustainability rating.

“That is the result of a responsible and focused approach to managing and forecasting our finances, managing our assets and prioritising the delivery of services to our community in a sustainable way,” he said.

“We have kept a close eye on the bottom line and remained disciplined in our decisions and we are proud of that.”

The council’s overall debt is forecast to be $305 million in 2031.