Councils await budget to choose on LNP deal
CASH-strapped Queensland councils must wait for the delivery of the State Budget by Treasurer Tim Nicholls on Tuesday to determine whether they will take up new infrastructure funding arrangements introduced by the Newman government.
Infrastructure Minister Jeff Seeney has made Newman government support for critical infrastructure dependent on cuts of 10% in development charges for rural lots and 15% for commercial and retail projects.
Councils remain uncertain as to whether the money would be provided as loans or grants and whether it would compensate for lost revenue from infrastructure charges to developers.
Local Government Association of Queensland estimates that current caps on development charges left councils having to subsidise 30% of the cost of infrastructure for new development.
Council budgets to be handed down over the next two months would pass judgment on the value of the State Government's offer.
It is one they won't take up if it leaves them worse off.
LGAQ head Greg Hallam said most councils, including those from the resource sector, would not sign up for the deal even at risk of losing Royalties to the Regions funding.
Mr Seeney has said the government is committed to getting the balance right between keeping local government sustainable and encouraging new developments.
The LGAQ in turn warned in its submission on the new charges regime that continued state emphasis on construction as one of the four pillars of the economy may have significant impacts on local government revenue and subsequent capacity to fund new infrastructure.
Councils are already accumulating new debt at the rate of $750 million a year.
LGAQ president Margaret de Wit said the gravity of the situation had been made clear by recent State Audit Office findings that half of Queensland's councils were on the edge of financial viability.
The removal of State Government infrastructure grants in 2006-07 has seen local government debt balloon from $1.8m to the $7.1bn it is expected to hit on June 30.