While other governments are slipping into deficit for the first time in a number of years, South Australian councils, in aggregate, achieved an operating surplus in 2007/08 according to State Budget Papers.
It is possible that this is the first aggregate surplus for Local Government ever, but this can’t be confirmed as governments only started recognising depreciation costs of infrastructure, such as roads, in the early 1990s.
Local Government Association of South Australia (LGASA) President, Mayor Felicity-ann Lewis, said it is an important milestone and evidence that councils are being more disciplined in financial management, particularly as they are also spending a record amount on infrastructure renewal.
“While many councils still have infrastructure backlogs, we are making headway, getting closer to the current generation paying its way, rather than deferring infrastructure costs for the next generation,” she said. “This is an aggregate picture and it is important to remember that council positions vary greatly. But all the signs are positive.
“The most important thing for councils is to maintain discipline. Surplus budgets enable governments to maintain services, upgrade infrastructure and position them to borrow if they need to.”
Mayor Lewis said councils had achieved this by working on efficiencies, communicating the importance of maintaining rates, and by practising discipline on expenditure.
“Sometimes you just have to say no,” she said.
Council figures aggregated show the operating surplus for 2007/08 was around $300,000, rounded in the budget papers to a balanced position ($0 million) compared with aggregate deficits running at nearly $90 million ten years ago and $50 million as recently as 2003/04.
The level of South Australian Local Government net financial liabilities at 30 June 2008 stood at $416 million, a relatively modest amount when put in the context of Local Government infrastructure and other community assets valued at roundly $14 billion.
“That is like having a $10,000 mortgage on a $350,000 house,” Mayor Lewis said.
“Local Government capital investment expenditure in 2007/08 was a record $447 million, representing a
33 per cent increase on capital spending in 2003/04.
“It is important to acknowledge that the Roads to Recovery program and supplementary road funding from the Australian Government have assisted us to reduce infrastructure backlogs and the new Community Infrastructure Program will further help this year and next.”
Mayor Lewis praised the level of information in
SA Budget Papers on State/Local transfers and finances as leading the country.
