Sydney councils with the worst deficits in 2019-2020 revealed
A Daily Telegraph investigation reveals 38 per cent of metropolitan local governments are in the red. SEE HOW YOUR COUNCIL PERFORMED
NSW
Don't miss out on the headlines from NSW. Followed categories will be added to My News.
The share of Sydney councils failing to stand on their own financial feet has soared to its highest in six years, triggering calls for an urgent funding review.
An investigation by The Daily Telegraph – using data so fresh that in many cases it has yet to go before councillors – reveals 38 per cent of metropolitan local governments were in the red in 2019-20 once grants and other external revenue sources were stripped away.
That is up from 32 per cent the previous financial year.
It is also the worst outcome against the “operating performance ratio” benchmark, which is set by the state government, since 2013-14.
The biggest deficiency in 2019-20, of 9.5 per cent, was by Burwood, even though it got a special variation to raise rates by three times inflation.
The Telegraph’s request for an interview with Burwood’s Labor mayor John Faker or general manager Tomasso Briscese was turned down.
In a statement the council said 2019-20 had been financially “extraordinary” because of COVID-19. However, it is unclear if Burwood would have been in the black even without the pandemic. The council didn’t clarify prior to before publication.
Waverley was next worst, with a cash deficiency of 8.34 per cent. It also blamed coronavirus, which it said cost it $9.1 million. Its operating shortfall was $10.6m.
Without Covid “the operating performance ratio would have been close to the industry benchmark of 0 per cent,” or break-even, the council said.
Burwood and Waverley ran surpluses in 2018-19. But for Blacktown, Georges River and Woollahra, 2019-20 was their second straight year in the red.
Woollahra was also the first metropolitan council to fail the “debt service cover ratio” benchmark since 2015-2016. It was the council that missed that year as well.
The Telegraph’s request to interview Woollahra’s Liberal mayor Susan Wynne or brand-new GM Craig Swift-McNair was declined. In a statement the council said it had “a proud history of solid financial management” but had been “materially impacted” by coronavirus.
NSW Labor’s local government spokesman Greg Warren said there was a much broader problem.
The financial model for councils was “clearly broken when you look at the numbers that can’t make ends meet”, Mr Warren said.
He called for an urgent review by the state government.
University of Newcastle local government professor Roberta Ryan also said a review was needed.
“The big issue in local government is the whole financial set-up,” Prof Ryan said.
She said more autonomy was needed.
Both Mr Warren and Prof Ryan said rural and regional councils face even greater challenges than metros.
Local Government Minister Shelley Hancock said she was working with councils “to develop legislative changes to introduce more flexibility into the rates system”, including by adding more rate categories and permitting income growth to match population increases.
With Sydneysiders forced to remain home more than usual, revenue from parking fees and fines fell at many councils.
These lucrative income sources were down by $15.3m for the City of Sydney, although it still met all the benchmarks. For Northern Beaches council, fees and fines dropped by $3.6m. It failed to meet the operating performance ratio, as did North Sydney, which also reported a fee and fine shortfall of more than $1m.
The Telegraph obtained data from more than two-thirds of Sydney councils.
Some of the rest did not respond to requests; others, such as Liverpool, Strathfield and Willoughby, said their financials were not finished.
MORE NEWS
Three men face life in prison over huge cocaine bust at sea