Budget red ink alert

Glenorchy boss warns TasWater takeover won’t stem losses

GLENORCHY commissioner Sue Smith has warned the council risks falling further into the red regardless of whether the State Government takes over TasWater.

At a special general meeting yesterday, Ms Smith accepted the 2017-2018 budget estimates for the council.

While rates will rise by just 2.5 per cent for the coming year, the council is predicted to record a $3 million turnaround, with the deficit for 2017-208 to be $1.7 million de- spite a $1.3 million surplus in 2016-2017.

Glenorchy acting general manager Tony McMullen said the original deficit was set to be about $470,000 but a $1.17 million Financial Assistance Grant from the Federal Government coming earlier than expected meant it was credited to the previous financial year

Ms Smith commended the work that council staff had done in preparing the budget but she did warn about the im- pacts changes to the councils’ distributions from TasWater could have on future bottom lines.

Before the State Government announced its plan to take over the ownership of TasWater, Tasmania’s councils agreed to halve the distributions they receive to fund necessary infrastructure improvements.

Glenorchy will receive a $3.2 million distribution from TasWater in 2017-2018 and Ms Smith said the council needed to start planning for changes even if the Government’s takeover was not successful.

“I think if we will see if the status quo remains, and I say if, the distributions will continue to be half of what we previously have gotten and possibly even halved again,” she said.

“And if the State Government takes over TasWater then there will be $168 million of assets that will be removed from the balance sheet and that will make a difference.”

Treasurer Peter Gutwein has said that as part of a government takeover, councils would receive dividends from the State Budget.

Ms Smith said she was worried about what impact this could have on the council’s future budget.

“This could make a difference of $1.5 million to the budgets that council are preparing.”