Councils facing more financial uncertainty due to ongoing Red Fleet dispute

Councils across NSW have been set up to fail their annual audits because the NSW Government is forcing them to carry the depreciation cost of assets they neither own nor control, Local Government NSW (LGNSW) said.

LGNSW President Darriea Turley AM said the current NSW Government was overseeing a dramatic increase in the number of councils being hit with qualified audits, after only two were issued in 2021.  

And she said the spike in qualified audits comes down to the NSW Government’s insistence that council accounts include depreciation costs for Rural Fire Service (RFS) assets.

“It is a ridiculous notion that councils are responsible for RFS assets. In most instances we don’t even normally know when a new fire truck arrives in town until we see a photo of the Minister and the local fire service in the media,” Cr Turley said. 

“But despite this, the NSW Government continues to dig its heels in on the issue and heap more financial uncertainty on the local government sector at a time when councils facing unprecedented natural disasters can least afford it. 

“A qualified audit report can have serious financial repercussions for councils, limiting their ability to obtain loans and grants.

“The bullying of councils by the NSW Government needs to end. The government needs to do the right thing and take back control of the RFS assets.”

Cr Turley said LGNSW and councils across NSW wholeheartedly support the efforts of RFS volunteers who do a heroic job to keep communities safe.

“This is purely about questionable accounting practices adopted by the NSW Government,” Cr Turley added.

“Requiring councils to record in their financial statements the total annual depreciation expense of RFS red fleet assets – estimated to be $145 million in the past year – will result in many councils having even less money to repair potholes in local roads or rebuild communities devastated by recent floods, let alone continue to provide and maintain other community infrastructure and services.

“And that hurts everybody, including those RFS volunteers who are such a critical part of their communities.

“This financial sleight of hand being perpetrated by the NSW Government shows a real disregard for our rural and regional communities, as well as for city fringe areas such as the Blue Mountains, Hawkesbury and Wollondilly.

“We’re so concerned about the implications of this issue that several metropolitan councils who don’t have a RFS are passing motions in support for the communities that do. 

“I applaud all the councils who have opposed this nonsensical stance from the State Government. 

“Councils are speaking with one voice and we won’t tolerate this Government’s attempts to polish up their own accounts at councils’ expense.

“LGNSW is willing to work with the government to resolve this discrepancy as quickly as possible so that councils can concentrate on the recovery needs of communities right across the state.”

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