By Julian Bajkowski
Queensland councils have cautiously welcomed the Newman government’s second budget for the state, breathing a collective sigh of relief that local governments appear to have been spared much feared spared funding cuts after natural disasters and falling revenue receipts depleted Treasury coffers.
After a tumultuous first year that saw massive public service job cuts, Queensland Treasurer Tim Nicholls’ second set of accounts has slated the state’s fiscal deficit grow to $7.7 billion, around double that previously forecast.
The march further into red ink was widely anticipated and flagged by the government as unavoidable after Cyclone Oswald and another summer of natural disasters smashed home a $2.5 billion damages bill for Queenslanders to absorb, a situation worsened by a $5.3 billion drop in overall revenue on the back of a strong dollar and falling prices for commodities like coal.
The tough fiscal challenges have direct flow-on effects for local governments in Queensland because many councils are still effectively in recovery mode after widespread damage to infrastructure that will take years to replace, repair and flood-proof.
Local Government Association of Queensland President Margaret de Wit said that the official budget announcement contained few surprises and on first reading, no overall funding reductions for local governments and that health, education and disability services had been key recipients of expenditure increases.
“We appreciate that the state has had to make tough choices with this budget and had been anticipating little relief for councils already dealing with financial pressure under the very same conditions,” Ms de Wit said.
Treasurer Nicholls said that Queensland now had to do more with less. In practical terms, the 2014-15 Budget result would “depend heavily on the timing of payments from the Australian Government for its share of natural disaster costs,” he said.
Ms de Wit said that despite the funding shortfalls, the LGAQ was looking forward to continuing to work closely with the State and Federal Government on a new approach to disaster management.
“We certainly welcome the commitment to building increased resilience in communities across the state along with the recognition that developing preventative measures for local communities makes for better policy than clean-up funding,” Ms de Wit said.
Those measures include a joint state and federal ‘Betterment Fund’ of $80 million earmarked for disaster proofing local communities that was described by the state government as ‘down payment on resilience’ with the LGAQ saying that Mr Nicholls had acknowledged the State still had unfinished business with Queensland communities.
Neither the Queensland government or the LGAQ are shying away from the prospect that some of the new revenue raising measures needed just to keep the state running will not be popular.
They include a 26.6 per cent hike in electricity prices and an extended Emergency Management, Fire and Rescue Levy that will be imposed upon an around 400,000 Queenslanders.
Ms de Wit said that changes to the Emergency Management Levy would not be welcomed by rural councils, and needed to be implemented by the State government with both care and thought to avoid unintended consequences.
“Funding will be pivotal to assist councils to implement this new levy, with a collection fee to be paid in recognition of the fact that councils should not be out-of-pocket for the cost of being the State’s collection agent,” Ms de Wit said.
The LGAQ has listed the key funding measures relevant to local government as being:
• Continued base funding of $43.5 million of transport infrastructure development grants for upgrades to local government controlled roads;
• Continued investment in the ‘Royalties for the Regions’ program as forecast;
• $66. 9 million allocated to The Local Government Grants and Subsidies Program, delivered as $47.1 million supporting priority infrastructure projects and a further $19.8 million under Local Government Floods Response Subsidy to support projects that will protect communities and infrastructure from future floods;
• Increased funding to support essential social and municipal services previously funded from general liquor licences in Indigenous communities; and
• Significant reconstruction and resilience works to continue in 2014-15 with capital grants to local governments of $2.01 billion, including $80 million for betterment projects to restore essential public assets damaged by ex-Cyclone Oswald.
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