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    Coat of ArmsMedia Release
    Minister for Main Roads and Local Government
    The Honourable Warren Pitt

    State Government reviews amalgamation costs

    Minister for Main Roads and Local Government
    The Honourable Warren Pitt

    Friday, July 11, 2008

    State Government reviews amalgamation costs

    Newly formed councils across the state have been invited to submit additional requests for funding from the Queensland Government where they feel that the costs of amalgamation have exceeded the funding paid to them.

    Local Government Minister Warren Pitt said that while the reform funding package already in place was substantial, the State Government was prepared to look at cases where the costs could be shown to exceed the funding provided.

    “The Queensland Government has allocated $27.1 million to cover amalgamation costs,” Mr Pitt said.

    “Some local governments have claimed that their costs of amalgamation will exceed the funding provided to them.

    “The Bundaberg Regional Council, for example, has stated it believes amalgamation costs will be greater than the $500,000 it has received from the State Government.

    “I invite the Bundaberg Regional Council – and any other council who feels the same – to provide a detailed financial submission outlining the costs they are facing.”

    Mr Pitt said council submissions also needed to address the cost savings that they anticipated would be realised as a result of amalgamation.

    “Reform in other states has seen a cost saving to councils of about 2 to 3 percent, so councils have a responsibility to their ratepayers to outline where savings can be achieved over the coming years,” he said.

    “These savings should also be factored into any potential rates rises that councils are considering, notwithstanding the necessary investment in services and infrastructure that councils should and need to make in their regions.

    “The government recently wrote to all councils regarding submissions for additional funding and specifically asked that in their submissions councils include details of how they intend to fund amalgamation costs through potential future savings.

    “The LGAQ's whole-of-sector submission for additional funding estimates an annual saving across the sector of $90 million.

    “These savings are, of course, ongoing annual savings, so will very quickly recover any upfront amalgamation costs. In fact using the LGAQ's own submission, councils most likely will recoup these costs within their first term of council.

    “The savings will continue to accrue long after the costs are absorbed. Therefore, there is no need for councils to inflate rates to pay for amalgamation costs,” Mr Pitt said.

    “I look forward to receiving the Bundaberg Regional Council’s submission and in particular to the savings that it believes can be achieved following this year’s merger of councils in the area.“

    Mr Pitt said the government would continue to work closely with councils to ensure no council was unfairly disadvantaged as a result of amalgamation.

    Media contact: Minister Pitt’s Office 3227 8819