Hobbs hits out on debt

GLADSTONE Regional Council’s debt increase of 132 per cent last financial year has come under attack, and the debt won’t decrease any time soon.

Liberal National Party’s Shadow Local Government Minister Howard Hobbs hit out at the State Government for forcing Queensland councils into amalgamations which are showing to be costly to ratepayers, with local governments now burdened with more than $4 billion of debt.

Gladstone council’s debt increased from $49 million to $113.5 million (market value) during the 2009/10 financial year, according to the Queensland Treasury Corporation’s 2009-10, while Townsville Regional Council’s debt rose 89 per cent, Brisbane City Council’s debt rose 132 per cent and the Gold Coast City Council’s increased by 137 per cent.

“Whatever happened to the streamlined, sustainable future that amalgamation was meant to provide for local governments in Queensland?” Mr Hobbs said.

Gladstone council chief executive officer Graeme Kanofski said the majority of the debt increase was attributed to the upgrade of the Gladstone Airport ($66.2m), with other debts being Kirkwood Road Stage 2 ($2.9m), regional landfill ($2.1m), industrial sewerage ($0.8m), Tannum sewerage treatment plant ($2.8m) and amalgamation costs ($9.7m).

He said despite claiming the amalgamation costs from the State Government, they refused to meet the costs.

Mr Kanofski said the airport debt would be repaid through passenger and landing fees, as will the landfill, while the Tannum plant will be funded through sewerage charges on users of the facility and relevant users will fund the Yarwun (industrial) plant.

He said if the airport project was excluded, the rise would have been 23 per cent. “The anticipated debt position as at June 30, 2011, is $130.7 million (book value),” Mr Kanofski said.

“The borrowings this year relate to the airport and desalination projects.

“The benefits of amalgamation are over the longer term and therefore the loan and repayments spread this cost over 15 years.

“Borrowing in itself is not a bad thing when it funds long-term infrastructure.”

Mr Hobbs said councils were feeling the pinch of the State Government’s decision to cut millions of dollars from a number of grants and subsidies.



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