CPA Australia urges Queensland to focus on financial sustainability

Core Viewpoint - CPA Australia recommends that the Queensland government expand its review of local council finances to focus on long-term financial sustainability rather than solely on depreciation of fixed assets [1][2]. Financial Stability Assessment - Depreciation should not be the only indicator for evaluating the financial stability of councils, as it is just one factor in the complex equation of asset management [2]. - The consumption of assets over time reflected by depreciation does not directly influence decisions regarding asset replacement or maintenance [2]. Holistic Approach to Asset Management - Councils are encouraged to adopt a more comprehensive view that includes real-world asset data, service delivery needs, and demographic pressures [3]. - The recommendation for a broader perspective follows a significant error in depreciation calculations by Sunshine Coast Council, which reported a A$30 million error contributing to a A$20 million budget deficit [3]. Strategic Recommendations - CPA Australia calls for a strategic, state-wide approach to asset management, improved financial expertise among council staff, and more reliable accounting processes [4]. - Factors such as climate change, population growth, and rising infrastructure needs should be integrated into councils' financial planning [4]. Collaboration and Competency Development - There is a need for stronger collaboration between finance and other departments, such as engineering, to enhance accurate financial reporting [5]. - Councils should invest in the right competencies and systems to support effective financial management, as errors in depreciation can undermine public trust [5]. Standardization and Support Systems - CPA Australia advocates for a centralized framework and guidelines to ensure consistent practices across councils [6]. - The necessity for standardized guidelines and improved methods for assessing asset value and estimating useful asset life has been identified [6]. - A centralized support system is proposed to help councils implement best practice procedures consistently [6].