Government offer could free up $280 million for council coffers
Published Thursday, 10 September, 2020 at 12:45 PM
Minister for Local Government, Minister for Racing and Minister for Multicultural Affairs
The Honourable Stirling Hinchliffe
Eligible Queensland councils are being offered the chance to refinance their debt to an interest rate of less than 2 per cent, releasing up to $280 million a year in cashflow.
Local Government Minister Stirling Hinchliffe said councils were paying an average of 4.4 per cent a year in interest, and some up to 8.82 per cent a year.
“The Queensland Treasury Corporation 20-year loan interest rate is currently sitting at 1.92 per cent a year,” he said.
“There are more than 50 councils eligible to apply to have their loans refinanced, which could release up to $280 million a year in cashflow across those authorities.
“Coronavirus continues to cut a swathe through health and economies across the globe.
“Because we acted swiftly and decisively to contain the virus, we are doing really well on the health front.
“Now we’re rolling out our plan for economic recovery and delivering it across the state.
“This opportunity for councils to refinance debt is part of that plan and is available to the councils that have debt with Queensland Treasury Corporation.
“This is also about the Palaszczuk Government’s proven track record of supporting councils by allowing them the flexibility to determine what’s good for their communities.”
Local Government Association of Queensland CEO Greg Hallam welcomed the move, saying many Queensland councils had been juggling high borrowing costs.
“Any move to reduce these costs and free up cash to help councils do more to protect jobs and stimulate local economies is welcomed,” Mr Hallam said.
He said it was now up to individual councils to decide the best move for their communities going forward.
Local Government Finance Professionals Queensland President Tony Brett said effective management of debt by councils was vital to their long-term sustainability and their ability to provide services and assets for their communities.
“Cash management has become very important in the past nine months with many councils seeing revenue streams reduce either as a direct outcome of COVID-19, or indirectly through councils supporting their communities with extended rates payment periods and reducing or waiving other fees and charges,” he said.
“The assistance offered by the Queensland Government to support refinancing existing debt to free up cash through lower repayments is definitely welcome news, and it gives councils the potential to enhance service delivery and reduce their overall interest costs.”
Media contact: Bernadette Condren 0417 296 116