Auditor-General highlights councils' financial challenges

Published: 23rd April 2021

Queensland councils welcome the recommendation of the state’s Auditor-General for more funding certainty to be provided to councils with financial sustainability continuing to be a critical issue for the sector.

Local Government Association of Queensland (LGAQ) Head of Advocacy Alison Smith said the local government financial audits report – tabled in State Parliament on Thursday – outlines just how tough COVID-19 has been on councils and communities already struggling amid challenging budgetary conditions.

She said the Association would be working through the report’s findings and recommendations alongside its member councils.

“Councils need greater funding certainty, and we welcome the Auditor-General’s recommendation for more long-term programs to be provided to help local governments plan for the future,” Ms Smith said.

“The financial reality facing rural, remote and Indigenous councils is that their rate base is small – or in some cases non-existent.

“For almost half of Queensland’s 77 councils, the amount they collect in rates amounts to less than 15 per cent of their annual budget.

“They have to balance this with providing the services their communities need – including services they have had to step in to provide following market failures in their community, like childcare.

“And they have had to do this while helping their communities cope with and recover from natural disasters like floods and droughts, as well as the ongoing COVID-19 pandemic.

“These communities help underpin the Queensland and national economy through industries such as agriculture and resources.

"They should not be penalised with even fewer services just because they live outside of major centres.

“That is why the LGAQ and its member councils have been campaigning for funding certainty from the State and Federal governments, including increasing the rate of Financial Assistance Grants the Commonwealth provides to councils back to one per cent of Federal taxation revenue, as it was in the mid-1990s.

“The Commonwealth raises more than 80 per cent of all taxation revenue. Local governments generate just three per cent of total government revenues, but they have responsibility for more than thirty per cent of Australia’s public infrastructure. The State raises the rest.

“Local government needs support so our local communities can continue to receive the services and infrastructure they not only need but deserve.”