Wollongong City Council has swung from a $10.2 million operating deficit to a $106.5 million surplus in a year. But its own general manager warns against reading too much into it.
Councillors will go through the 2025-26 draft annual financial statements at Monday night’s meeting. The headline surplus is propped up by one-off items - $53.7 million in West Dapto developer contributions, $29m from selling Stream Hill land, and $31m in federal grant handouts - and Greg Doyle’s report is careful to say so. Strip those out and the day-to-day result has improved, from a $55.7m deficit to a $13.9m surplus.
“Council maintains a sound financial position, supported by strong liquidity, low debt and continued investment in community infrastructure,” Mr Doyle wrote. He also noted that the council’s future capacity “continues to be sensitive to external funding shocks”.
A few weeks ago it looked like those shocks had arrived. The NSW Local Government Grants Commission has abandoned its contentious review of how federal Financial Assistance Grants are shared among councils. Under the scrapped model, Wollongong would have lost 67.5 per cent of its annual federal grant allocation, a $16 million annual hit. There are few, if any, NSW councils that could absorb that. Wollongong’s leaders readily admitted it would have been “catastrophic”.
The commission backed down after overwhelmingly negative feedback. Just 10 of the 102 local government submissions supported the new formula.
Commission chair Linda Scott said last week that changing the methodology without a bigger pool from the Commonwealth was unsatisfactory.
“Throughout consultation, councils made it clear they supported reform being considered in an environment where no council would be significantly worse off than under the current approach. Until future Commonwealth funding levels are increased, that certainty cannot be guaranteed,” Ms Scott said.
Lord Mayor Councillor Tania Brown said the cut would have posed “an ongoing risk to this organisation’s financial sustainability, our service delivery and our capacity to renew key infrastructure like roads, buildings and public pools”.
With the immediate threat gone, the council will push to restore Financial Assistance Grants to at least 1 per cent of Commonwealth taxation revenue, as resolved at its extraordinary meeting.
“We have said all along that we supported more equitable distribution of funding, but it should bolster all councils.”