Twenty-five of Queensland’s 77 councils are at “high risk” of becoming financially unsustainable, the state’s Auditor-General has found.
The impacts of the coronavirus pandemic in 2020, while not unexpected, contributed significantly to a deterioration in councils’ financial performance, with 70 percent spending more than they earned, Auditor-General Brendan Worrall said this week.
The office’s Local Government 2020 report found revenue during the 2019-20 financial year rose 1 percent from the year before, reaching $12.9 billion, while total expenses rose by 3 percent to $11.2 billion.
Debt surged 16 percent to $10 billion – almost double the amount two years ago – aggravated by waiving fees, cleaning costs, and fast-tracked major projects due to the pandemic.
“Local councils are the first line of connection to communities; providing Queenslanders with essential services, which involves a high level of interaction. The resources councils needed to deliver these services were put under immense pressure,” Mr Worrall said.
The report found most councils highly reliant on state and federal government grants have regularly incurred operating losses for the last five years.
Those councils that regularly incur operating losses often have weak strategic planning, asset management, and financial management practices, the report added.
It said the Department of State Development, Infrastructure, Local Government, and Planning could assist councils by providing greater baseline funding certainty with multi‑year grant programs.
The department could also work with councils to improve financial and asset management capability.