December 15, 2021
Local Government Minister Steven Miles should “get off his backside” and fix a funding cut which could force the South Burnett Regional Council to lift rates by 5 per cent next year.
The passionate appeal by Cr Kirstie Schumacher to Minister Miles and Queensland Local Government Grants Commission chair Paul Bell came at Wednesday’s general meeting as councillors discussed sending a protest letter to the State Government.
Council CEO Mark Pitt told the meeting he received a letter on Tuesday telling him Council’s Financial Assistance Grant would be slashed by 21 per cent over the next three years, ie. 7 per cent per year.
The change will mean Council will lose almost $500,000 next financial year, and even more when inflation is taken into account over the following two years.
Mr Pitt said he had only received news about the cut in a letter from the Queensland Local Government Grants Commission the day before.
He said the Commission had reworked its grant funding model for the first time in a decade.
The State Government had already telegraphed that 50 councils would be receiving an increase to their FAGs grants as a result of the review, while 27 would be receiving a cut.
But Mr Pitt thought the South Burnett would be one of the Councils receiving an uplift after enduring $10 million in FAGs cuts between 2012 and 2018.
However, it now appeared the region was in the same boat as Toowoomba, Bundaberg, Fraser Coast, Rockhampton and a number of other, much larger Councils which had received similar cuts.
Mr Pitt said he estimated the decision would cost the Council between $1.5 and $2 million in total over the next three years.
He said he was “deeply disappointed” with the process, which was dropped on Council without any consultation or prior warning, because it would throw the burden of making up the shortfall on to the shoulders of ratepayers.
He asked that Council write a letter to the Commission’s chair objecting to the decision.
Mayor Brett Otto told the meeting he calculated the reduction would force Council to introduce a 5 per cent rate rise next year, followed by rises of between 6 and 7 per cent in the following two years if the current level of services were to be maintained.
Mayor Otto said he shared Mr Pitt’s anger.
“I am highly dissatisfied with the process by which this review has been conducted and the outcome of the review,” Mayor Otto said.
He said he found it hard to understand how a small regional Council that has been dealing with droughts for decades but has done everything asked of it in terms of financial and asset management sustainability could be hit with a 21 per cent cut.
“This Council has worked very hard to balance its Budget and deliver its services in an increasingly challenging environment, and it seems to me that we are being disadvantaged because of that.
“We have not asked for an increase in our FAGs grants, we have simply asked that they be held at the level we have been receiving for many years.”
The Mayor said that when the time value of money and inflation was applied to FAGs grants, it was very clear they had already been significantly reduced since the 2008 amalgamation.
“To now apply another reduction – to rip $2 million out of our Budget over the next three years – is simply punishing our Council for doing what the government has asked us to do,” he said.
“We’ve done the right thing, and we should not be punished or disadvantaged for that.”
Mayor Otto said he would support a motion that Council write to the Chair of the Grants Commission and the Local Government Minister expressing Council’s concern about how the review was conducted.
“This has been slapped on us at the eleventh hour without appropriate consultation, and it is simply not good enough,” he said.
Cr Kirstie Schumacher said she shared the Mayor’s views and suggested it might be even better if the Mayor and Councillors met with the Chair of the Grants Commission in person to pursue the issue.
“This is absolute hogwash,” Cr Schumacher said.
“There is no way we can make up this shortfall in our Budget. And what this will come back to is impacting the services we can provide and the liveability of our lives here in the South Burnett.
“I would like this Grants Commissioner and the Minister to get off their backsides in their fancy offices and actually get into a region like ours to sit down in a room with people like us and have a look around.
“We have got things failing left, right and centre.
“How dare they make a decision like this? It’s absolutely appalling.”
Other Councillors agreed, and the motion was carried unanimously.
Footnote: The South Burnett Regional Council’s FAGs grant was slashed by $1.4 million in November 2012. This was followed by a three-year freeze on the indexation of FAGs grants between 2016 and 2018, which deprived the Council of a further $2.8 million. By the time the grants were unfrozen and indexation was restored, it was estimated the SBRC had lost $10 million through these two events – a shortfall that was made up through rate rises.