Ipswich budget impacted by slow economy and previous council expenditure

29 June 2020

Ipswich Mayor Teresa Harding says the city’s 2020-21 budget has been significantly impacted by the slowing economy and the wasteful spending by the previous council, which would be revealed in the Transparency and Integrity Hub launch on Wednesday.

“Opening the once hidden books of council’s past controlled entities has been tormenting and heartbreaking,” Mayor Harding said.

“The abuse of power and blatant misuse of ratepayers’ monies was ethically and morally wrong on so many levels.

“Furthermore, the lack of governance and accountability and poor project prioritisation has put us further behind the eight ball.”

Mayor Harding said the past council had deferred planned spending of up to $150 million on vital community infrastructure – including on roads in Springfield which were now over capacity – while still increasing council’s debt.

“They prioritised expenditure elsewhere. Some of those poor decisions are hurting the community now as we can’t afford the infrastructure,” she said.

“When we commenced reviewing the budget some two months ago, we soon realised our hands were tied because of bygone financial decisions.”

Acknowledging past, present and future challenges, Mayor Harding said poor decisions by previous councils were being felt financially now and council was not properly financially prepared for slowing economic growth and COVID-19.

She said the forecast revenue impact on the city’s $600 million annual budget was concerning.

“It is estimated that council’s 2020-21 budgeted revenue could be reduced by around $23 million as a result of the impacts of COVID-19,” she said.

“This includes impacts of reduced fees and charges collected from developers due to slowing growth rates, and potential further waivers of license fees and permits to provide some relief to businesses, community and sporting groups.”

Mayor Harding said a below-CPI rates rise last year had also reduced the council’s financial capacity.

“Your new council has been working on a measured approach as part of the 2020-21 budget process with an aim to get the city back on track.”

Council has maintained operating surpluses in the past and is committed to maintaining an operating surplus in future years. However, in order to play catch-up and deliver on the region’s huge capital works program, 2020-21 will be an exception, with a proposed operating deficit of $8.7 million.

Flagging the current challenges, Mayor Harding acknowledged council was considering a necessary rates rise in Tuesday’s budget.

“This is a budget for our times and I can only be open and transparent about council’s financial position and our plan to stimulate the economy over the next year and return the budget to surplus in the years to come.

“This budget will keep people employed, maintain services and keep the Ipswich economy moving.”

Mayor Harding said the council had been faced with a significant amount of tough decisions, but was confident that the budget would deliver value during uncertain times.

“Our recently adopted Buy Ipswich procurement policy will ensure council buys more from local businesses than ever before.

“This will inject millions of ratepayers’ dollars back into our local economy and keep workers employed.”