July 8, 2022
How was the South Burnett’s 2022-23 Budget framed? Where did the money come from … and what is the outlook for the region’s finances?
On Friday, South Burnett Mayor Brett Otto introduced the 2022-23 Budget with a speech outlining the processes used to create it, the thinking that guided it and the limits imposed on it.
Later, CEO Mark Pitt PSM released a separate statement in which he explained the mechanics of how the Budget was being funded, the structure of the SBRC’s financial mix and the Council’s outlook.
southburnett.com.au believes these are both important statements for ratepayers seeking more information about the environment in which this year’s Budget was framed and the future of the SBRC’s finances, and we are publishing them in full:
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Mayor’s Budget Address
The people of the South Burnett, today, we as your representatives, table the proposed South Burnett Regional Council Budget for 2022-2023.
To the people of our region, this is your money, this is your Budget, this is your Council’s commitment to responsibly applying the funds provided by ratepayers and taxpayers towards building our region and providing you with a brighter future.
As custodians of your public funds, we have a duty to our community to provide value for money for ratepayers, improved service standards, enhanced facilities for youth, families, the disabled and the elderly as well as a commitment from Council to create an environment that encourages investment in our region, promotes economic prosperity and population growth and most importantly, supports the sustainable development of all communities across our rural towns and villages, irrespective of size or location.
Council has engaged intensively over several months now in working through the Budget line by line and together, with our CEO and staff, have made every effort to deliver a Budget that provides a responsible and compassionate response to the economic challenges facing the people of our region.
Having said that, this Budget is far from perfect, indeed it is very much a work-in-progress and I acknowledge that we have much more work to do, particularly in addressing the projected $3.52 million deficit.
It is, however, an important first step and reflects the priorities outlined in Council’s Operational Plan for the year ahead.
It is a $108 million plan to building a stronger South Burnett through partnerships with higher levels of government and by working together through stronger connection to, and better engagement with our community.
In delivering this Budget, Council remains conscious of the financial, social and emotional burden endured by our region’s residents through the recent floods and the cost of living pressures brought on by the increasing inflation and interest rate rises.
In response to such, Council has been careful to formulate a considered and measured response to supporting the community through these challenging times. A response that provides short-term relief without compromising the ability of Council to sustain a sound financial position and asset management strategy for future generations.
As such, this Budget, if adopted will provide:
- A modest 1.75 per cent increase to general rates, with the application of three-year averaging to smooth the impact of recent property valuation increases;
- $75 million worth of operational services to our region;
- $33 million investment in capital asset renewals and upgrades;
- $28 million in road maintenance and upgrades, and
- The introduction of kerbside recycling.
I must acknowledge the contribution made by the Queensland and Australian Governments in providing grant funding from a range of programs supporting Council’s operational and capital programs.
Having said that, I must convey our Council’s deep disappointment in the Queensland Grants Commission’s decision to reduce our share of the Australian Government’s Financial Assistance Grant program by some $500,000.
In this Budget, our ratepayers will fund 88 per cent of Council’s operating budget, with only 12 per cent coming from government assistance.
This is well above the State average for rural-based regional councils and places significant pressure on our organisation to deliver an increasing list of services, once provided by higher levels of government.
As such, we join with other councils across Australia in calling on the recently elected Australian Government to increase the Local Government Financial Assistance Grants provided to States from 0.5 per cent to 1.0 per cent of Federal taxation revenue. We also call on the Queensland Government to address the inequitable allocation of these funds to our Council.
In closing, I wish to acknowledge and thank my fellow Councillors, our CEO Mark Pitt, Council staff and in particular our General Manager Finance and Corporate Services Susan Jarvis and her hard-working finance team for their concerted efforts in bringing the 2022-23 Budget to fruition.
I have a strong sense that the current decade will provide a renewed period of regional prosperity for our region.
Mayor Brett Otto
South Burnett Regional Council
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Financials Improve But Challenges Ahead
Preliminary results for the 2021-22 financial year show the South Burnett Regional Council will record a small surplus despite being affected by reduced Federal Government funding and substantially increased costs.
Early payment of the financial assistance grant contributed to the result, with the Council again returning a better-than-forecast financial position than the original Budget adopted for the 2021-22 financial year.
Importantly, this has been done with lower-than-CPI rate increases and reduced debt levels.
The 2022-23 financial year Budget has been adopted after six months of deliberations including more than a dozen workshops and livestreamed Budget committee meetings involving Councillors and the Executive Leadership Team.
However, the work is not over with the adoption of this Budget as this new Financial Year will be one of the most difficult yet due to the impact of external influences beyond Council’s control, especially the forecast unjust reduction in next year’s Financial Assistance Grant, exacerbated by the recent revaluation of properties within the region.
Overall total rates revenue in the 2022-23 Budget will increase by 4.97 per cent compared to a CPI rise of 5.1 per cent, resulting in an anticipated collection of $53.952 million, which represents 74.48 per cent of operating revenue, the balance being made up from grants, fees and charges, interest earned and other revenue streams.
The Budget’s focus has been on retaining service levels while making savings by being better at what Council does.
Council continues to reduce its debt levels for the fourth year in a row and any future loans will be directed towards essential water infrastructure.
This year we will continue to restore the road network from the large amount of flood damage from an unprecedented four declared flooding events in the 2021-22 financial year.
It is estimated that the total repair works to be undertaken will be in the vicinity of $20 million and Council acknowledges the strong support of the state and Commonwealth governments through the restoration of public assets program.
This work will provide economic stimulus for our community, not only directly with the engagement of local contractors and jobs but indirectly with the flow-on to the business community.
Council has been successful in securing significant funding from both levels of government, particularly the Commonwealth’s Local Road and Community Infrastructure Program and the Building Better Regions Fund, and the state government’s Works for Queensland program.
This funding will assist Council to deliver the capital works program of maintenance and minor works of essential services, thereby supporting local jobs and the regional economy.
This year Council will also undertake a significant Capital Works program, with a Budget of $32.622 million, including Council’s contribution of $22.463 million.
Mark Pitt PSM
South Burnett Regional Council CEO
- Related article: South Burnett Rates Rise 1.75pc
