By Rob O’Brien

Local government funding cuts announced in the Queensland State budget will lead to delayed infrastructure projects and an increase in rates, one of the State’s mayors has said.

Mackay Regional Council Mayor Col Meng said funding cuts would leave the council with little option but to lift rates to cover an $80 million funding shortfall in council’s 10-year Capital Works program.

Cr Meng criticised the government’s decision to scrap the Roads and Drainage Grants after announcing plans to reduce the 40 per cent Water and Sewerage subsidies to councils in 2011.

“It is short sighted and creates an unnecessary burden on a regional council and its ratepayers,” he said.

“We instantly lose $500,000 by this latest decision and that automatically puts pressure on our budget,” lamented Cr Meng.

The Queensland State Government announced the spending cuts in its 2009-10 budget announcement last week.

The Treasurer Andrew Fraser said the government had “introduced the longer term reforms needed to chart a course back to budget surplus and begin the path to recovering our AAA credit rating over the medium term”.

But Cr Meng said the cuts to funding will mean the council has to cut projects, either borrow money or increase rates to deliver the necessary infrastructure.

Mackay Regional Council received $509,000 per year through the Roads and Drainage Grant program, which helped fund projects such as bitumen resealing, kerb to kerb channeling and drainage upgrades in many of the region’s older residential areas.

“It really makes it tough for us to deliver what our ratepayers expect when funding is cut at the last minute.

“We will endeavour to minimise the impact on ratepayers where we can, but the latest funding cuts certainly create enormous pressure on council’s budget,” he said.

Mackay allocated $29 million to new roads and drainage projects in 2008-09 and was keen to retain the significant commitment next financial year.

Finance portfolio councillor Darryl Camilleri said the funding cut was another example of the State Government’s cost-shifting mentality.

On its current 10-year Capital Works program, Mackay faces an $80 million shortfall in funding because of the State Government’s decision to reduce the Water and Sewerage Grants to councils in 2011.

“All these costs are part of a council’s operating budget and without state funding, we have no alternative but to pass the costs on,” Cr Camilleri said.

While acknowledging the government needed to make tough decisions during the current economic climate, Cr Meng said it was “unreasonable” to expect councils to do more with less funding.

“It could have a detrimental impact on future developments and stunt growth in the region,” he said.