Townsville First proved poor money managers
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,