Councils advised to spend on infrastructure

By Staff Writer

The Local Government Association of Tasmania (LGAT) is urging the state’s councils to continue funding infrastructure renewal as they start to prepare their annual budgets.

According to LGAT President, Mike Gaffney Tasmanian councils are well positioned to continue funding infrastructure renewal programs. He suggests they could prove vital as the economy slows and unemployment increases.

“The recently announced Commonwealth funding of $8.25 million for infrastructure works will provide a significant boost in 2009 but it is important that councils maintain their own programs into the next financial year,” he said.

Mayor Gaffney expressed concern over the potential for unemployment to grow in 2009 and stressed that infrastructure development could prove significant for contractors and communities.

He also encouraged councils to carefully consider borrowing to expand asset renewal programs given the low interest rates currently available.

“On average, Tasmanian council borrowings are very low compared to the assets they own.

"As long as councils remain focused on their financial sustainability goals I am confident most can expand their programs – particularly for renewing existing infrastructure.”

However, he warned that buying new infrastructure could worsen a council’s financial position “because of additional long-term maintenance and other operating costs”.

"All councils are not in the same position so it is important they do their own analysis of these issues and consult their communities regarding their draft annual programs early in 2009, as they do every year," he said.

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