Cassowary Coast Regional Council

The recently released state government budget for 2009-2010 has serious implications for local government.

The current subsidy programs for water and sewerage are scheduled to be reduced from 2011. The larger councils will have the subsidies removed and the smaller rural councils will have these programs diminished.

Exactly where Cassowary Coast Regional Council (CCRC) fits, as the twentieth largest council in Queensland, is not known at this time.

We have also received notice that the road and drainage grant scheme has been abolished.

The effect on the CCRC would amount to a reduction of approximately $200,000 per annum on the road and drainage program and possibly millions if the water and sewerage program goes.

Cardwell township will still have the sewer connected at a cost of $6 million to ratepayers, as it was approved prior to the recent announcements.

Water for Innisfail remains our number one priority and will have to be funded most likely through borrowing.

Sewerage for Innisfail may be impossible to fund if subsidies evaporate or are significantly reduced. This may result in pollution into the Great Barrier Reef waters increasing. However if council doesn’t have the money or the capacity to borrow, or to increase already high rates and charges, there is not much choice.

There are also implications for other works as our borrowing capacity may be fully utilised on Water and Sewerage projects.

My view is that loan repayments (principal and interest) must remain affordable. This requirement limits the total funds able to be borrowed.

The state government has shifted the financial burden onto councils and ultimately the rate payers. The federal government also has funding programs and local government will no doubt look to them for assistance, but these sources may also have reached a limit.

The Local Government Association of Queensland believes the reduction in water and sewerage subsidies will add an additional $5000 to the cost of each new residential parcel of land and will also affect the cost to ratepayers of upgraded treatment plants.

There was no forewarning that the state subsidies would be cut and in Cassowary Coast Region’s particular circumstance this is a serious blow. All of the reports on our future viability were based on council receiving higher than normal levels of subsidy for Water and Sewerage upgrades in Innisfail.

Over the next few months the state government should deliver its response to our submissions for water and sewerage funding. These applications were based on reports funded and commissioned by the state government into our viability. They all assumed that high levels of subsidy would be essential.

A negative outcome on the subsidy issue will have a huge impact on our future.