City finance lags neighbours
The City of Busselton is more than $34 million in debt, and its overall financial health is rated far below neighbouring local governments including the City of Bunbury and Shire of Augusta Margaret River.
The State Government released the latest figures on its new MyCouncil website this week.
The City of Busselton had a rate growth of 8.05 per cent in the 2018-19 financial year, which was almost double the City of Bunbury’s rate growth of 4.42 per cent and more than double the Shire of Augusta Margaret River’s figure of 3.02 per cent.
Busselton’s Financial Health Indicator score, which is calcul-ated from the seven financial ratios that local governments are required to calculate annually, sat at 40 while the City of Bunbury scored 61 and Shire of Augusta Margaret River scored 71.
A FHI result of 70 and above indicates sound financial health. The City of Busselton’s FHI was 72 five years ago. Last week, Busselton Mayor Grant Henley justified the proposed BEACH development by describing the City’s debt levels as “pretty modest”.
“Our debt levels are pretty modest and during a depression you need big infrastructure projects to drive the economy,” he said.
The City’s expenses have grown 36 per cent over five years while revenue has not kept pace, growing only 14 per cent over that period.
Vasse MLA Libby Mettam said it was important the City was prudent with budgeting for the 2020-21 financial year, with many residents feeling the effects of the COVID-19 pandemic.
“Rates have grown by an average of 7.4 per cent per annum, or two to three times the rate of inflation, highlighting obvious interest from the community in limiting this pressure, particularly post COVID-19,” she said.
Despite the public figures, City of Busselton chief executive Mike Archer defended the City’s financial position, suggesting the City’s debt levels were “deemed appropriate”.
“The City of Busselton has debt loan borrowings of $34.4 million dollars, which is deemed appropriate given the balance of our current assets and cash reserve, which is $73 million,” he said.
“This is well within the Local Government Department’s debt/loan borrowing ratio.”
The City of Busselton is due to release its budget for the 2020-21 financial year on July 27.
Residents can view more at www.mycouncil.wa.gov.au.
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