May 13, 2015
A decision by the Federal Government to freeze Financial Assistance Grants (FAGs) to councils for three years until 2017-18 drew a withering response from South Burnett Deputy Mayor Keith Campbell at Wednesday’s Council meeting.
Cr Campbell warned the South Burnett stood to lose almost $2.8 million from its income by the time the freeze was lifted.
“This is equivalent to a 12.6 per cent rate increase over three years just to make up the difference,” Cr Campbell said.
“That’s untenable.”
Cr Campbell was speaking on a motion asking Council to support a campaign by the Australian Local Government Association and the Local Government Association of Queensland to ensure FAGs grants continue to be indexed annually.
“At present, FAGs grants make up 13.1 per cent of the South Burnett Regional Council’s annual income,” Cr Campbell said.
“The main reason our rates have moved up in recent times is because the level of financial assistance from the Federal Government has reduced.
“There are only three ways to beat that.
“One is to lobby the Federal Government as hard as we can alongside the LGAQ and ALGA to lift their contribution. Another is to reduce or even close down services.
“And the third is to continue adjusting rates relative to the outcomes of the other two.”
Mayor Wayne Kratzmann agreed.
“At the moment the Federal Government takes 84 per cent of the taxation pie, State Governments get 14 per cent and councils get the remaining 2 per cent.
“The Federal Government has been reducing its support for local government for many years, and I think it’s now got to the point where they need to give councils a bigger slice of the pie.
“Our annual cost rises are always higher than CPI because of the types of products we buy and the types of services we provide. This is well known.
“So trying to keep their contributions at or below CPI or freezing grant levels just winds up hurting ordinary ratepayers.”
Cr Damien Tessmann also agreed, but took aim at the Grants Commission which distributes Federal money to councils.
“At the same time the Grants Commission took $1.4 million away from the South Burnett in 2012, they gave Maranoa Regional Council a $70,000 increase,” Cr Tessmann said.
“Maranoa Council are doing very well out of gas fields in their region; they get millions of dollars a year from airline companies to use Roma airport; and they do very well out of other some other industries they have in that region too.
“The South Burnett does not have access to these types of resources.
“Yet when we asked the Grants Commission to explain why they’d cut $1.4 million from our annual grant but given Maranoa an extra $70,000, they were unable to explain it.
“In fact, no one I know from Ministers downwards can explain how grants are allocated. It’s almost as if they use a ouija board to draw up grant allocations.
“Any system that has such a lack of transparency has got to be wrong.”.
Cr Barry Green agreed with Cr Tessmann that a meeting between Councillors and representatives from the Grants Commission in 2013 had been “a waste of time”.
“They cannot explain what they do or how grants are worked out. And they cannot expect councils to continue putting up rates to make up for Federal and State Government funding shortfalls.
“The answer is to push them for a fairer slice of the pie.”
Cr Kathy Duff then reminded everyone they’d gone a bit off track.
“We need to address the core issue, and that’s the three year FAGs freeze,” she said.
Councillors voted unanimously to support the ALGA-LGAQ campaign.
- Editorial: Show Us The Money
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Over the past 2 years or so the federal and state government have been blamed for one thing or another by this council. Although they may appear to be going into bat for the shire and the ratepayers what have we heard from our Federal Member Mr Bruce Scott? After all he is reported to be the member for Maronoa, When did he last visit Kingaroy as a elected member just to hear from the electorate at grass roots. One question that could be answered, just how much will our rates rise because of the freeze and then maybe a pay rise for the councillors
Over the years councils have pumped millions of dollars into various schemes to placate vested interests and groups giving the appearance of social cohesion and imparting a belief of wide public expectancy of residents to all relevant government grants commissions. These schemes all have one thing in common, they diverted funds away from council’s primary responsibilities: roads, reticulation, rubbish, and rates affordability. South Burnett Regional Council’s focus has shifted away from basic infrastructure requirements to tourism that could affect government revenue allocations. How grants are allocated may be confined to the mysterious world of bureaucratic complexity but a reasonable assumption can be made that total revenue received including tourism grants would be considered part of council’s total revenue and would impact on federal government Financial Assistance Grants along with state government funding arrangements. Therefore a reasonable assumption by any government agency is that sufficient funds have been issued to South Burnett Regional Council.
http://www.qlggc.qld.gov.au/financial-assistance-grant.shtml
Ten years ago the four old Councils used to get over $11 million a year combined in Federal grants. So even at CPI, the SBRC should be getting $16.5 million a year now. Instead, it gets about $8-$9 million. I think the real reason for the nationwide decline in FAG grants is partly the amount the Feds have had to shell out for disaster recovery efforts in the last few years (billions) and partly because of the ballooning social welfare bill (many more billions). It’s not rocket science.
Council’s expenditure on non-essential tourism entertainment activities, streetscapes et cetera would most likely have surpass that $8-$9 million figure suggested. Council’s primary responsibilities are roads, reticulation, rubbish, and rates affordability as seen by Government not tourism and streetscapes et cetera.
Governments see council finances as a total income and target grants to achieve a set standards for basic infrastructure requirements. Tourism and streetscapes et cetera are not basic infrastructure requirements needed to meet that standard and can affect grant funding to that primary basic services requirement.
Unfortunately Rod rocket science other then simple rocketry, the launching of a sky rocket on Guy Fawkes night, is a technically accomplishment beyond simplistic ideological idealism.
Cr Campbell warned the South Burnett stood to lose almost $2.8 million from its income by the time the freeze was lifted.
“This is equivalent to a 12.6 per cent rate increase over three years just to make up the difference,” Cr Campbell said.
“That’s untenable.”
“There are only three ways to beat that.
“One is to lobby the Federal Government as hard as we can alongside the LGAQ and ALGA to lift their contribution.
Another is to reduce or even close down services.
“And the third is to continue adjusting rates relative to the outcomes of the other two.”
Having read the above replies using 3 minutes that I will never get back, Cr Campbell has correctly spelt out his thoughts on this situation. I agree that Council should continue to lobby for increased funding. However monies sought are not a right of passage.
Should grants be reduced then adjust your expenditure, if that means reducing or closing services so be it. “Cut one’s coat according to one’s cloth”.
Here’s the usual answer … adjust relative to the outcome(s) ie another bombardment of rate rises. BUT Cr. Campbell as finance portfolio chair together with Mayor Kratzmann do NOT have a mandate to bring about 12.6% rate increases over three years.
We have Local government elections in just under 12 months. Let this council table future rate increases in their individual election campaigns.
Jack, I’m surprised to hear the Council has been spending $8-$9 million a year, every year for the last three years on tourism entertainment activities and streetscaping projects.
Please list these $24 million to $27 million worth of activities and projects – along with your approximation of how much was spent on each one – so I can take this situation up with my Federal member!
Council has every opportunity to allow unrestricted public evaluation of its financial records therefore allow the public to make an informed decision not only on tourism but all of council’s financial activities.
Jack, have you ever bothered to read the 100+ pages of the council budget? It’s on their website. There are lots and lots of nice little tables in it with heaps and heaps of figures for you to ponder over. BTW why would I trust your evaluation of the budget over that done by the State Govt? Their auditor is checking every council in Qld and doesn’t have an axe to grind about the current councillors in the South Burnett.
Disgusted, your disapproval lacks foundation and denies rate payers the opportunity to ascertain a clear understanding of councils business model interaction with public planing policies. Allowing unrestricted public evaluation of councils financial records can only advantage councils standing in public eyes.
Jack, I’ll repeat it in your own words. If ratepayers want “the opportunity to ascertain a clear understanding of council’s business model interaction with public planning policies” they should just download the Budget which is on council’s website. This does allow “unrestricted public evaluation of council’s financial records”.
Here, I’ll make it easy for you: http://www.southburnett.qld.gov.au/documents/12544/40038750/SBRC%20Budget%202014-2017.pdf
Well Jack, I’m still waiting for your list of $24-$27 million a year of “tourism entertainment” projects for the last three years. Do you want to include road maintenance? (because tourists might drive on our roads). Or water plant upgrades? (because they might drink the water). Personally, I think your claims would fit the new Kingaroy waste water treatment plant. Maybe that’s why the Council is building an over-capacity one.
The devil, as always is in the detail … Council had every opportunity to release a comprehensive financial report, department by department, portfolio by portfolio but failed. This long winded public relations exercise showcasing councils evasive response to public accountability. Allowing unrestricted public evaluation of councils financial records can only advantage councils standing in public eyes.