The Queensland Government has created a Depreciation Taskforce that will help councils tackle the growing challenges of depreciation and ultimately deliver cost of living relief to ratepayers.
The taskforce will focus on improving the sector’s understanding of depreciation, as well as identifying risks and opportunities to better manage assets and reduce financial impacts on ratepayers.
It will look at how depreciation of council assets, such as roads, water and sewerage networks, parks, and buildings, are treated and can be better managed to ensure councils remain financially viable.
The Depreciation Taskforce terms of reference include identifying opportunities to enhance depreciation outcomes across the areas of financial management and reporting; service planning and asset management; grants and funding; and capability/capacity building.
The taskforce will focus on the challenges for local governments in managing depreciation and present opportunities to reduce the impact of depreciation on a council’s sustainability.
The Taskforce will be led by local government finance consultant and sector veteran Neil Castles.
Castles has spent more than 20 years at Queensland Treasury Corporation, including leading its Local Government team.
He spent a further five years as a senior executive within the Queensland Government.
The taskforce will deliver its final report to the Minister in December.
Minister for Local Government, Water and Volunteers, Ann Leahy, said that the State Government was committed to a genuine partnership with councils to deliver empowered, strong and local governments.
“We are seeing councils struggle with soaring costs and the effects of depreciation to their budgets, and it’s clear that the issue must be addressed,” Leahy said.
“Calculating depreciation over the forward years is challenging and we are seeing some councils facing significant losses due to the devaluation.
“The Queensland Government is empowering councils to deliver for their communities and the taskforce’s end game is to, where possible, find savings and pass them on to ratepayers.
“The taskforce will assess ways to help councils achieve financial sustainability.”
Castles said the taskforce would also aim to enhance stakeholder awareness of the implications of depreciation on service planning and investment decisions.
“For the past 30 years, local government has been a big part of my professional life, and my goal has always been to improve outcomes – including the financial sustainability – of local governments.
“Depreciation affects sustainability and is a complex issue. I am looking forward to leading this taskforce, working with local governments and other stakeholders, and finding opportunities to better manage depreciation at the local council level.
“Without finding ways to support our councils, local communities will be faced with large rate rises to cover growing depreciation and other expenses and nobody wants that.”
Local Government Association of Queensland CEO, Alison Smith, said that councils welcomed the establishment of the taskforce.
“Queensland councils are fighting a daily battle to provide the liveability communities rightly deserve in the face of significant cost increases,” Smith said.
“Addressing depreciation and the significant impact it is having on council Budgets and financial sustainability is a welcome step forward for local government across Queensland and we look forward to working closely with the taskforce.”
