POLL: Lake council deficit tipped to top $27m

LAKE Macquarie City Council has projected an operating deficit of $27million for this financial year, a blowout of $13million in three months.

Council documents show it projected an operating deficit of $14million at the start of the financial year.

But the council’s September budget review, to be considered at a council meeting on Monday, has revised that forecast to an operating deficit of $27million.

The council said there was a simple reason for the huge deviation.

A council statement mainly attributed ‘‘the appearance of a $13million discrepancy’’ to government grants received last year for work to be done this year.

Liberal Cr Ken Paxinos said questions needed to be asked about the ‘‘mismatch’’ in the council’s budget.

‘‘One of the basic accounting procedures is the need to match income and expenditure,’’ Cr Paxinos said.

‘‘We need to know where we are financially and our accounting practices need to be rock solid.’’

Labor Cr Daniel Wallace said a lot of councils had problems with their balance sheets, partly because of the timing of government grants.

‘‘It’s not just an accounting issue faced by Lake Macquarie,’’ he said.

News of the deficit projection comes a day after Newcastle City Council said it was considering cutting $19million from its annual budget to get back in the black.

Lake Macquarie council has taken a different route of higher taxes and bigger government. Lake residents will pay an average rate rise of 55per cent over seven years, with business rates to rise by 71per cent.

As reported last month, Lake Macquarie council plans to run budget deficits until 2016-17.

Cr Paxinos said he was concerned it would take so long ‘‘to get back in the black’’.

Cr Wallace said deficits were not a bad thing if the money was spent on infrastructure, but ‘‘they’re not good if they are spent on maintaining current levels of services’’.

Council general manager Brian Bell declined to be interviewed.

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