Report Highlights Need for Local Government Reform

21 June 2007

Report Highlights Need for Local Government Reform

A report on council finances prepared by independent firm, McGrath Nichol, has provided further evidence that structural local government reform is needed in Queensland, Minister for Local Government Andrew Fraser said today.

Mr Fraser said the Local Government Association of Queensland’s (LGAQ) claim that “weak” rated councils are in a better position than AGL, Telstra and Wesfarmers is laughable.

“The report makes some significant points - most notably that reform needs to happen,” Mr Fraser said.

“It also identifies mergers or amalgamations as an option to achieve economies of scale.

“It’s now extraordinary for the Local Government Association of Queensland (LGAQ) to publicly claim the Governments’ reform plans are without foundation.

“Particularly as the Association pushed for reform in the first place through a voluntary process that went nowhere fast.”

Mr Fraser said the McGrath Nichol report surveyed 21 councils to gauge whether or not they were “solvent”.

“At no time has the Government ever claimed those councils were insolvent otherwise we’d have administrators in them,” he said.

“What is clear is that some councils are struggling as evidenced by Auditor-General’s report, the PricewaterHouseCoopers report, the Queensland Treasury Corporation report and now, the McGrath Nichol report.

“The Government is not going to wait for the financial situation of councils to worsen before taking action. To maintain the status quo would be irresponsible.

“The LGAQ-commissioned report does not paint a rosy picture for local government and I would encourage all those with an interest to read the report.”

The report recommends alternatives to mergers and boundary changes including:

·Revenue increases, such as increased rates and charges;

·Cost reduction, such as shared services and outsourcing (or put more simply job cuts);

·Increased borrowing.

“The LGAQ hasn’t said much about that part of the report,” Mr Fraser said.

Mr Fraser said he was happy for ratepayers to make up their own mind about the report.

“The Government’s preference is to build a new stronger system of local government for Queensland.”

Media Contact: Chris Ward 0418 424 654