The Questions No One Asked

July 12, 2022

by Dafyd Martindale

The South Burnett Regional Council’s 2022-23 Budget – handed down last Friday – was unusual in a couple of ways.

One of them was that Mayor Brett Otto voted against his own Budget for the second year running (joined this year by Cr Kathy Duff and Cr Jane Erkens).

The other was that it contained a plan to increase water access and sewerage charges by 6 per cent and 3 per cent a year for the coming decade, with the aim of building an $80 million war chest to replace the South Burnett’s ageing water and sewerage systems.

The three dissenting Councillors – Otto, Duff and Erkens – said the reason they were voting against the Budget was because it proposed to use $1.5 million of remaining Works For Queensland grant money to build a bigger water storage system on Mt Wooroolin.

Mayor Otto argued this money should come out of the water infrastructure budget instead.

This would allow the Council to spend $1.5 million on a range of small community projects including:

• Nine car park shelters for cabins at BP Dam
• A camping ground at Durong
• An upgrade to Kumbia’s Apex Park
• A weaner sculpture display at Proston
• Upgrades to the Proston lookout
• Upgrades to Tipperary Flat Park in Nanango
• Completion of Lions Park in Kingaroy
• A basketball half-court in Murgon
• Fixes to street drainage issues at Tingoora
• Sealing of McKell Park’s car park in Wondai
• Shade structures in Wondai’s Coronation Park, and
• Stage 2 upgrades to Murgon’s QEII Park

Against this, the remaining four Councillors argued Kingaroy’s water needs were steadily becoming more acute and while the projects listed were all worthwhile, other ways to fund them could be found in the coming year.

They underlined that in any battle between “wants” and “needs”, the “needs” of residents must be more important.

And this argument prevailed on the day.

(We would point out, too, that roughly half these projects will benefit tourists much more than local residents).

However, another argument that didn’t see the light of day in any of this debate was (get your dictionary out) intergenerational equity (IE).

IE applies to a lot of government spending and it’s based on a very simple idea:

When a Council builds long-lived assets, is it fair the ratepayers of today should pay the entire cost of something that will serve the needs of several generations of ratepayers to come?

Is it fair that all of us should see our water access and sewerage charges increase by 60 per cent over the next decade so our Council can replace our region’s 70-year-old water and sewerage systems?

Systems that will then be enjoyed – largely free, except for routine running and maintenance costs – by future ratepayers for the next 60 to 70 years after they’re built and paid for?

Most people would say no, that’s not very fair at all.

So the usual way governments ensure IE occurs is to borrow money and then repay it over the lifetime of the long-lived asset, or at least a big slice of it.

Right now the South Burnett Regional Council is carrying about $30 million in borrowings, which it is repaying at an average of $3 million a year.

Most of this money was borrowed to build long-lived assets such as Kingaroy’s new waste water treatment plant or upgrades to the Gordonbrook Dam water treatment plant.

Both of these were built six to eight years ago by previous Mayors who paid heed to IE and acted accordingly.

But this latest Council don’t seem to have looked at this option, or if they have, they’ve kept very quiet about it.

So we’d like to ask why they haven’t looked at borrowing or if they did, why did they rule it out?

And a second question we’d like to ask is this:

If Council is going to raise our water access and sewerage charges by 60 per cent between now and 2032 to fund an $80 million war chest, what are they going to do when the extra money is spent and the job is done?

Slash our charges? Give us all a big rebate?

Or quietly put the extra revenue into their budgets and hope we’ve all forgotten we paid $80 million to give future ratepayers a free ride?

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