Councils face $8.5b debt as developer costs cut
DEVELOPMENTS like Caloundra South will add $1.5 billion in debt on Queensland councils, putting extra pressure on ratepayers, the LGAQ warned on Thursday.
Local Government of Queensland boss Greg Hallam said four priority development areas were being given special deals which would mean developers pay less in infrastructure charges.
His comments come as the Sunshine Coast Regional Council is due to meet in closed session on Monday to discuss concerns about a reported $500 million shortfall in development funding for Caloundra South.
Developer Stockland has maintained it will pay its fair share of costs while it says the project will bring the region much needed jobs, schools, and other facilities.
The Caloundra South Priority Development Area (PDA) was declared 22 October 2010 and covers 2310 hectares.
It is located south of the existing Caloundra urban area, the Caloundra Aerodrome and the Sunshine Coast Regional Business and Industry Park.
The Bruce Highway forms the western boundary and Bells Creek Road forms the southern boundary.
The Caloundra South PDA will become a community providing approximately 20,000 dwellings to house a population of approximately 50,000 people.
Mr Hallam said already councils paid about 70% of costs of projects, while developers paid 30%.
Over time, much of that money was recouped from new ratepayers in the area.
However, he said the loss of state subsidies and a freeze on infrastructure charges meant councils were footing more and more of the bills.
He gave an example where in Bundaberg, the council was having to build a new sewage treatment plant at a cost of $100 million without any state or federal funding support.
"It will increase the per pedestal charge from $500 per person to $1200 per person per annum
"That's the problem councils are facing.
He said councils had also been hit by the loss of water profits after new water utility companies had been set up.
"It's a billion dollars a year that we don't have,'' Mr Hallam told ABC Sunshine Coast.
He said different charges had been applied in four different areas in Queensland for developers because they were deemed economic development priorities.
"A different set of rules apply and council does not have control of the process.
"In those instances, it is actually run by the state and the state is the arbitrator and negotiator between the developer, in this case Stockland, and the council.''
"It's a really difficult one.
"I mean how much debt can a council be loaded up with.''
"As it stands now we have the highest local government debt in Australia.
"It's gone from $1.8 billion to the best part of $7 billion in five years.
"And when we add the debts from these types of developments we are talking about across Queensland (it will be) $8.5 billion.''
"That's bigger than the debt of the Western Australian government.''