Newspaper article News Mail Bundaberg Qld.

LOW ON CREDIT CEO's Concern over Inference; Discussion over Council's Levels of Debt

Newspaper article News Mail Bundaberg Qld.

LOW ON CREDIT CEO's Concern over Inference; Discussion over Council's Levels of Debt

Article excerpt

Byline: Chris Burns chris.burns@news-mail.com.au

BUNDABERG Regional Council executives are concerned that it may be restricted from borrowing more money, which could be used for large infrastructure projects, from the Queensland Treasury Corporation.

Chief executive officer Steve Johnston said in the council briefing meeting yesterday that one of the reasons the Queensland Government wanted to reduce borrowing from all councils was because it affected the state budget.

"While it is only a small percent of total borrowings, clearly the debt for the Queensland State Government has been an issue for some years now," he said.

Mr Johnston said the concern on limiting borrowing had been raised with council staff, but the matter needed to be discussed with QTC.

The issue was raised when councillors were told the council applied to borrow $7.5m from the QTC.

The Department of Local Government said it does not have any policy to limit local governments from borrowing money.

"The department assesses any borrowing application from local governments in Queensland on an individual basis, with advice from QTC," a departmental spokeswoman said.

A QTC spokeswoman said it does not set policy, but follows the direction of the Queensland Government.

"QTC provides financial risk management advice to local governments and, in these discussions, will look at all of the financial data in an individual council's situation", she said.

"This would include a review of council's operating cash and contingency requirements, as well as any proposed use of excess surplus cash...and future borrowing requirements."

Council borrowings did not directly impact the Queensland Government's annual state budget, but it was one of the factors that rating agencies looked at when they decided what the government's credit rating should be. …

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