Queensland Councils ‘Poor Financial Planners’ Impacting Infrastructure Upkeep

Thursday, October 13th, 2016
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Many Queensland councils are nearing a “tipping point” where they won’t be able to afford the upkeep of major infrastructure like roads, an audit report says.

The vast majority of the state’s 77 councils have no idea whether they are financially sustainable, with only 10 having prepared long-term financial plans.

The Queensland Audit Office report into the long-term sustainability of local government revealed most councils were spending money without understanding how much expenditure was needed to maintain roads, water and sewerage networks.

“The clear risk is that some councils are approaching a tipping point where their infrastructure assets deteriorate or fail faster than they can afford to replace them,” Acting Auditor-General Anthony Close wrote in the report.

“It is concerning that many councils cannot reliably conclude whether they are financially sustainable.”

The report noted around 50 per cent of councils were continually spending more than they earned each year and 24 of them were forecasting deficits in the next decade.

Mr Close said some councils continued to rely heavily on government grants and some were failing to prudently manage life-long assets.

The report made a raft of recommendations, including that councils develop plans to explain financial forecasts and maintain complete asset plans.

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