Bulletins

Details

Additional budget requirements and annual report disclosures for South East Queensland Councils: Distributor-Retailer payments

Purpose

This bulletin is to advise local governments in South East Queensland of the following new requirements:

budgets must now include information about payments to/from Distributor-Retailers and
annual reports must now disclose certain information about payments to/from and liabilities owed to/by Distributor-Retailer Entities.

Background

The South-East Queensland Water (Distribution and Retail Restructuring) Act 2009 established a number of new entities, known as Distributor-Retailers, to operate the water distribution and retail businesses previously conducted by local governments in South East Queensland.

On 1 July 2010 those businesses were transferred from the relevant local governments to the new Distributor-Retailers. Subsequently the affected local governments will receive payments from, and may make payments to, the relevant Distributor-Retailers. These payments will include profit distributions, tax equivalents and interest on borrowings.

This bulletin is to advise the relevant local governments that amendments have been made to the City of Brisbane (Finance, Plans and Reporting) Regulation 2010 and the Local Government (Finance, Plans and Reporting) Regulation 2010 to require the inclusion of the abovementioned payments in their budgets and annual reports.

The amendments are contained in the Local Government Legislation Amendment Regulation (No. 3) 2010. They were approved by Executive Council on 25 November 2010 and were part of a broader package of transparency and regulatory protections developed in response to significant community concerns about the scale of water and wastewater price increases in South East Queensland.

Payments to be included in budgets

Relevant local governments in South East Queensland must now include the following payments in their budget for the financial year and the next two financial years:

the estimated profits of the distributor-retailer to be distributed to the local government
the estimated tax equivalents to be paid by the distributor-retailer to the local government under the South-East Queensland Water (Distribution and Retail Restructuring) Act 2009, section 100
the estimated costs of all other payments to be made by the distributor-retailer to the local government, or obligations or liabilities that will be owed by the distributor-retailer to the local government, under a financial arrangement entered into between the distributor-retailer and local government
the estimated costs, and the purposes, of all payments to be made by the local government to the distributor-retailer
the estimated costs of, and the reasons for, all obligations or liabilities that will be owed by the local government to the distributor-retailer.

Disclosures to be included in annual reports

The annual reports of relevant local governments in South East Queensland must now include the following disclosure relating to the financial year:

the profits of the distributor-retailer distributed to the local government
the tax equivalents paid by the distributor-retailer to the local government under the South-East Queensland Water (Distribution and Retail Restructuring) Act 2009, section 100
all other payments made by the distributor-retailer to the local government, or obligations or liabilities owed by the distributor-retailer to the local government, under a financial arrangement entered into between the distributor-retailer and local government
all payments made by the local government to the distributor-retailer, including the purposes of the payments
all obligations or liabilities owed by the local government to the distributor-retailer, including the reasons for the obligations or liabilities.

Last updated on Tuesday, 07 August 2012