Asset spend in spotlight

Council underspend in 19/20

A QUEENSLAND Audit Office report for the 2019/20 financial year has found Toowoomba Regional Council was not spending enough money renewing its assets – though the council said it will meet its target this financial year.

Previously, the council has set a target of 90% for its asset sustainability ratio, an indicator of how much money the council spends renewing existing infrastructure as a percentage of its asset depreciation bill.

TRC’s asset sustainability ratio for 2019/20 was 64.22%, according to the QAO’s 2020 financial audit report for local government, released yesterday.

Deputy mayor Cr Geoff McDonald said hitting the 90% asset sustainability ratio was difficult for growing local government areas like Toowoomba, because of the need to build new infrastructure to cater for growth at the same time as the need to maintain and renew infrastructure in older parts of the region.

He said the council had now set its own target of “above 70%” for its asset sustainability ratio.

“That’s been worked through with our bankers the Queensland Treasury Corporation, as well as the QAO,” he said.

“They understand our growth right across the region. It’s very hard to say let’s not let people come here, or let the development industry continue to grow, because we can’t build infrastructure there.

“It’s a Catch 22 for growing areas.” He also said the council’s $50m pandemic response stimulus program, of which $25m was to be spent in the current financial year, meant the council’s asset sustainability ratio was expected to balloon to 93.1% for the 2020/21 FY.

The council’s asset base sits at $5.03b with an annual depreciation bill of $105 million.

Cr McDonald said the council was in a good space to “deliver the services we’re entrusted to deliver to our community”.