Townsville First proved poor money man­agers

Townsville Bulletin - - OPINION -

I WOULD like to com­ment on the let­ter by the un­named mem­bers of Townsville First coun­cil­lors ( Townsville Bul­letin, July 8).

Firstly I would like to see whether Cr Tony Par­sons’ state­ment (“bud­get- re­ply” speech to me) to the coun­cil at its July 7 meet­ing could be made public.

Se­condly, all ratepay­ers would be glad to know of the small rate in­creases over the last two years, cre­ated es­sen­tially by the Mayor in bud­get prepa­ra­tion.

I’m sure we all welcome the deficit be­ing low­ered dur­ing the ten­ure of the Tyrell ad­min­is­tra­tion. Deficits can be re­cov­ered over a rel­a­tively short pe­riod of time.

What Townsville First doesn’t seem to recog­nise is that debt is a much more in­sid­i­ous at­tack on ratepay­ers be­cause re­pay­ments ex­tend over lengthy pe­ri­ods – mainly 20 years.

See, for ex­am­ple, past bud­get bor­row­ings ( now re­duced to 15 years) in any bud­get pa­pers. This is what hits us by in­creas­ing the rates.

If you bor­row $ 100 mil­lion from QTC, say at 4 per cent with quar­terly re­pay­ments over 20 years, the amor­tised pay­ment ( like mort­gage pay­ments) spread over 76,000 ratepay­ers is about $ 100 ($ 95) per an­num.

But each ratepayer will pay that for 20 years.

Bor­row­ing is usu­ally for new in­fra­struc­ture as­sets. But this should be done with great care.

In my com­mu­ni­ca­tion with coun­cil­lors Blom and Walker, I said I con­sid­ered the Mt St John Waste­water Pro­ject and the Mount Low Park­way as es­sen­tial, but that the Flin­ders Mall re­de­vel­op­ment ($ 56m) could have waited, and the RSL Sta­dium too and more so the Civic Theatre ex­ten­sions.

They did not have to be done al­most si­mul­ta­ne­ously.

This move plunged us into large debt ( 89 per cent in­crease from 2009 to 2010, al­most dou­bling the debt) and led to large rate rises and huge wa­ter charges.

Yes, you can bor­row for in­fra­struc­ture but you have to pay for it!

You can bor­row and raise rates to re­pay the loans, but do you want to im­pov­er­ish the pop­u­la­tion by re­duc­ing it to the debt sit­u­a­tion in Greece?

I had ad­vo­cated mod­est growth and bal­anced bud­gets.

This did not mean no growth nor did it mean ex­ces­sive or un­timely growth. I welcome state and fed­eral fi­nan­cial as­sis­tance. Ev­ery­one agrees with sus­tain­able fi­nan­cial man­age­ment but I don’t be­lieve that the Townsville First team prac­tised it.

One of the Gov­ern­men­tal Fi­nan­cial Sus­tain­abil­ity Per­for­mance pa­ram­e­ters is the Net Fi­nan­cial Li­a­bil­ity Ra­tio, which should be be­low 60 per cent. Townsville has vi­o­lated this in the past, is in cur­rent vi­o­la­tion, and will con­tinue to be in vi­o­la­tion for the next 10 years. R. L. AGACY,


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