Queenslanders face cuts to vital infrastructure including community pools, libraries and waste services as long-term financial pressures force councils to take drastic action to balance their budgets.

The dire financial future of councils across Queensland has been thrust into the spotlight after a Queensland Audit Office report revealed one-third were at high risk of not being sustainable.

Councils say reduced federal assistance grants over years and the COVID-19 crisis has cruelled the finances of many regions.

North Burnett Mayor Rachel Chambers warned her council faced being $5.5 million in deficit even if proposed cuts were made.

"These proposals include reducing swimming pool, library, administration and waste services," she said.

North Burnett Mayor Rachel Chambers
North Burnett Mayor Rachel Chambers

Cr Chambers said for the community, this meant potentially deteriorating levels of service and staff losses.

"Given local governments' role as the foundation on which all communities are built, the fact so many of these foundations are unstable, and crumbling, should sound deafening alarm bells at 1 William St," she said.

In Longreach, Premier Annastacia Palaszczuk did not commit to increased support for councils, but insisted Local Government Minister Steven Miles would be working with the mayors.

Longreach Regional Council Mayor Tony Rayner said he "absolutely" needed to scale back services to deal with funding problems, with a rate base that only funded 30 per cent of revenue.

Cr Rayner, who addressed Tuesday's special community Cabinet meeting in Longreach over local infrastructure commitments needed, said he had separately raised council sustainability.

"You have to consider what's the best use of your existing resources, so it could be as simple as maintenance at parks and reserves - whether you maintain those every month or every two months and start to reduce your costs," he said.

Carpentaria Shire Council CEO Mark Crawley said the council, which collects $7.8 million in rates each year, was reviewing its wide-ranging operations.

"We find ourselves providing services like child care and aged accommodation out of necessity due to the lack of other providers in these areas," he said.

"These are costs that are not traditional local government services and many rural and remote councils are in the same position."

Richmond Mayor John Wharton
Richmond Mayor John Wharton

Richmond Shire Council Mayor John Wharton said the cost to operate everything was unbelievable.

"We can't increase rates because it's not a big enough rates base," he said.

The Auditor-General's report found the gap between councils' revenue and expenditure had tightened in 2020.

Local government revenue grew 1 per cent to $12.9 billion last year, compared with a 3 per cent increase in expenses to $11.2 billion.

Councils are set to receive $502 million this financial year through the Commonwealth's Financial Assistance Grants scheme.

However, several have called for more, with the scheme failing to keep pace with inflation.

"The federal and state governments need to get together and do something about it … otherwise these communities in western Queensland will pass away," Cr Wharton said.

Local Government Association of Queensland CEO Greg Hallam said community demand for services was increasing but funding was in reverse.

Local Government Association of Queensland CEO Greg Hallam
Local Government Association of Queensland CEO Greg Hallam

"The LGAQ is calling on the Commonwealth to restore Financial Assistance Grants funding to 1 per cent of taxation revenue, as it was in the mid-'90s, to give councils the funding certainty they need to main the services their communities not only expect but deserve," he said.

"The LGAQ has also asked the State Government to maintain Works for Queensland funding at $100 million a year going forward."

Federal Local Government Minister Mark Coulton said Financial Assistance Grants had continued to increase year-on-year.

"In the last financial year, with programs such as Financial Assistance Grants, Roads to Recovery and the Local Roads and Community Infrastructure program at now record levels, Federal Government payments to local governments exceeds one per cent of Commonwealth taxation revenue," he said.

"How Financial Assistance Grants are allocated within Queensland, and whether states want to provide a greater share of GST to local governments, are both a matter for the Queensland Government."

Barcoo Shire Council Mayor Sally O'Neil warned her council was going to have to reduce its level of services, with a review currently under way.

"We can't fund our road maintenance and our water and all of those basic services that you provide as a local government," she said.

Burke Shire Council CEO Clare Keenan said she was comfortable with the position of the council's finances but called on the state government to provide compensation for "lost rates" following an indigenous land use transfer.

Boulia Shire Council Mayor Rick Britton said there needed to be five or ten years of fixed income from state and federal governments so councils could plan ahead.

But he said his council would not need to make any cuts to services at the moment.

Auditor-General Brendan Worrall used his report to recommend that councils improve their procurement and contract management practices to ensure they are getting value for money.

He recommended the state's Local Government Department review its funding model to find opportunities to provide "funding certainty" to councils beyond one financial year.

Originally published as Cuts to services loom as councils face multimillion-dollar debt bomb

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