De-amalgamated council budget

Here in the Cassowary Coast we are waiting to see what the Council budget will hold. In light of the (failed) move to de-amalgamate the old Cardwell Shire it is interesting to see how the de-amalgamated Douglas Shire has gone with its first budget.
Rates are increased by 5.2%, but a fairly significant deficit (something around 15% of Council revenues) is forecast.
As Mark Beath points out in his excellent post, this increase may well be a better result than the QTC forecasts (28% increase in the first year and then 18% more for the next 4 years) but that forecast would presumably have been based upon a more balanced budget. Getting to that position will take some time for Douglas Shire even with further 5.2% rises projected.
With General Rates accounting for just 38% of Council’s revenue, a balanced budget this year would have required an additional 40% increase in General Rates which is much more in line with the QTC forecasts.

UPDATE…The Cairns Post has written today (30th June) on how the 5.2% increase is “significantly lower than the exorbitant hikes predicted by the Queensland Treasury Corporation” without any mention of the fact that the Douglas budget is far from balanced. Mayor Leu says “This budget is based on sound financial sustainability principles and employs a strategy­ to return council’s operating result to a balanced budget within the shortest possible time.”; although there is no indication of how long that might be.

1 reply
  1. Mark Beath
    Mark Beath says:

    The QTC analysis was indeed based on a balanced budget scenario:

    QTC considers that a balanced operating result is essential to a council’s long term financial
    sustainability. Table 3 shows the estimated incremental increase / (decrease) in net rates and
    utilities per rateable property that would apply if de-amalgamation was successful and the
    Proponent and Remaining Councils were to achieve a balanced operating result (ie, the
    breakeven rates).

    Douglas was the weakest of the four de-amalgamation councils assessed with QTC assessment of annual recurring cost increase of $446 per rateable property. Would have to go back and have a look but not sure that is too far out?


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