By Adam Coleman
Local Government in Queensland has accused the State Government of breaking an election promise, cost shifting and “underlying hostility to urban councils” following the announcement of the 2009-10 Queensland State Budget.
Local Government Association of Queensland (LGAQ) executive director, Greg Hallam said it was “sadly ironic that the State has protected its own infrastructure programs by shifting costs to councils and home buyers.”
He said the budget will cost Queensland ratepayers an extra $100 million per annum from 2011.
“The reduction in water, sewerage, road and drainage subsidies will cost $85 million per year when the current scheme ends in 2011”, Hallam said.
“This will increase the cost by $5000 per block for new home buyers, offsetting any advantage gained through stamp duty savings or reforms in the new Sustainable Planning Act, and breaks a pre-election commitment given by government.”
He said ratepayers will have to pay an additional $5 million as a result of the loss of the fuel subsidy on council vehicles and an extra $6.7 million for the loss of the electricity street lighting subsidy.
“Urban councils will solely bear the impacts on these budget cuts.”
Whitsunday Regional Council mayor Mike Brunker told the ABC that changes to State Government subsidies for water and sewerage infrastructure combined with asset sell-offs, will force his council to rethink the way it delivers services.
He said the council can no longer afford to build two new water and sewerage treatment plants.
"Particularly with your infrastructure like water and sewerage, it’s a big kick out of our budget," he said.
"Now if we have to make that up, people are whingeing about 10 and 15 per cent rate rises – well hallelujah, she’s going to be a lot bigger than that."
Into deficit
Billed as a strategy to restore Queensland’s finances while creating jobs and maintaining the services required for a growing population, the budget forecasts a $1.95 billion net operating deficit for 2009/10 following a $15 billion ‘wipeout’ in revenues from the global recession.
Queensland 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”.
He announced a new savings target of $280 million to be achieved by streamlining the public service with a reduction in spending in areas such as travel, supplies and services, advertising and consultancies.
He also outlined in the budget, the Government’s intention to continue with reform to local government subsidy programs.
“We have in place a five year $700m funding program, which we will honour. We are honouring all commitments and increasing funding for projects in the next two years to bring this to a total commitment of $880m,” Fraser said.
“Local government reform was all about making councils stronger and we will implement a new program in 2011 that provides $45 million annually that will target infrastructure projects planned by councils who require financial assistance.”
Related Story: Business divided over budget benefits
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