More than half of state councils spending beyond their means

The state's Auditor-General recently released his analysis of council performance, which looked at financial sustainability and capital works expenditure, among other indicators.

As a whole, Tasmania's 29 councils achieved a surplus of $3.16 million in 2022-23, down from $5.23 on the previous year.

The state's 10 urban-classified councils recorded an underlying surplus of $8 million, but rural-classified councils recorded an underlying deficit of $5.34 million - up from $4.57 million in 2019-20.

Four of the ten state's urban councils were operating at an underlying deficit with the largest deficit recorded in Launceston ($3.4 million), Hobart ($2.6 million), Glenorchy ($1.2 million) and the Central Coast Council ($102,000).

Eleven of the state's rural councils were operating at an underlying deficit; the largest of which was held by Latrobe Council at $1.8 million.

Clarence City Council had the biggest underlying surplus amongst urban councils with $8 million and Waratah-Wynyard Council had the biggest underlying surplus in the rural council category with $880,000.

Auditor-General Martin Thompson in his report noted a concerning trend for rural councils, with the average growth in expenses outpacing the average growth in revenue over the past four years.

Mr Thompson said all councils had higher levels of increases in rate revenues in 2021-22 and 2022-23, which reflected decisions made by councils to combat increasing cost pressures, particularly for infrastructure materials, and the hangover of a rate freeze in 2020-21.

Urban council rate revenue increased by 14.1 per cent from 2019-20, compared to an increase of 17.7 per cent for rural councils.

Rural council employee expenses increased by 21 per cent from 2019-20, compared to 8.8 per cent for urban councils, and other expenses for rural councils increased by 28.6 per cent from 2019-20, compared to 18.2 per cent for urban councils.

Rates accounted for 66.6 per cent of own source revenue for urban councils and 59.5 per cent for rural councils.

Glamorgan-Spring Bay inflicted the highest rate hike on its ratepayers in 2022-23 at 14.4 per cent, followed by Derwent Valley Council (12.5 per cent), Dorset Council (10.6 per cent) and Burnie City Council (10.6 per cent).

Mr Thompson said the report showed councils continued to struggle to achieve their capital expenditure budgets.

Councils collectively spent $297.50 million on capital projects in 2022-23, which was just 71.2 per cent of the overall budgeted spend.