Queensland councils lay off 5000 staff to stay 'financially viable': LGAQ

Queensland's 77 councils have almost $1 billion less to invest as a result of state and federal government cutbacks and have had to lay off 5000 council workers, LGAQ chief executive Greg Hallam has told Fairfax Media.

The Local Government Association of Queensland was responding to a report into the long-term financial viability of Queensland councils by the Auditor-General's department.

In broad terms, the report, released on Tuesday, found that "most councils plan poorly for the long term", and that 24 of Queensland's councils predicted budget deficits for the next 10 years.

"The clear risk is that some councils are approaching a tipping point where their infrastructure assets deteriorate or fail faster than they can afford to replace them, with the potential to jeopardise the growth of their local economies and the health and well-being of their communities," the report said.

Mr Hallam said all Queensland councils were aware of the problems revealed in the report, and many were still financially adjusting to the post-2012 period when amalgamations were finalised.

He said successive Queensland governments had cut back water and sewage subsidies, cut back road and drainage subsidies to councils and restricted the money that could be raised through sale of bulk water since council amalgamations between 2008 and 2012.

Mr Hallam said the cumulative impact made long-term finance planning hard for many councils.

"We are around $400 million short of where we were with the loss of those water and sewerage subsidies," Mr Hallam said.

Mr Hallam said at the same time the federal government had – until recently – frozen federal financial assistance grants, which had cost Queensland councils about $200 million.

He said no council in Queensland disagreed with the Auditor-General's report, "but it is important to understand the context".

"So we have about $1 billion less to invest," he said.

Mr Hallam some recent funding improvements had been made by Local Government Minister Jackie Trad.

However, he said Queensland councils had scaled back staff, reducing the number of council workers in Queensland from the "high 43,000s to the high 38,000s".

"So there is 5000 staff who no longer work for councils."

What the report found

• Problems emerged after "red-tape reduction" legislation in 2012 removed the requirement for councils to prepare the community and long-term financial plans;
• It reduced the need for financial sustainability ratios from six to three;
• Eighteen councils use Brisbane's Consumer Price Index to forecast growth in revenues, rather than calculating a measure predicting actual expected increases;
• Forty-seven councils index revenue growth using rates that aren't referenced or explained, to determine their appropriateness;
• Only five councils use a council cost index – an index developed for Queensland councils – which is a closer correlation to the cost of providing council services.

However Mr Hallam said while the report made issues clearer to general readers it did not reveal anything councils themselves did not know.

"We are not denying it," he said.

"But the context is interesting."

The report makes clear most councils understand they have limited ability to prepare detailed long-term financial planning.

However Mr Hallam said the Auditor-General's report was "a bit disingenuous" because state and federal governments did not provide forward financial planning information to councils.

He said councils would appreciate more financial advice both state and federal government financial bodies, despite the report.

"A report has never had to actually fund a single piece of infrastructure," he said.