Local government borrowings for 2012-2013


This bulletin is to advise local governments of the procedure for borrowing applications for 2012-2013.


The Statutory Bodies Financial Arrangements Act 1982 provides that statutory bodies must have the Treasurer's approval to obtain borrowings. Under a general approval of 23 May 2003, the Treasurer's approval is granted for local governments to borrow from Queensland Treasury Corporation (QTC) subject to the approval of the Department of Local Government.

Separate approval of the Treasurer is required for borrowings other than from QTC. The process for approval of non-QTC borrowings is not covered in this bulletin.

Key points

Some key points for the borrowing program for 2012-2013 are as follows:

Application timeframes

The department strongly encourages local governments to seek borrowing approvals as early as possible in the financial year. Early submissions will enable assessments to be undertaken and approvals issued as soon as possible.

Once borrowing approval has been granted by the department, council can actively work with QTC in order to time the draw downs of approved borrowings.

In order to ensure that borrowing applications are processed and funds are available prior to 30 June 2013, local governments must submit completed applications prior to close of business Friday 28 September 2012. It is expected that applications received by this date will be evaluated by 31 December 2012.

Documentation required

The department requires the following information in order to assess borrowing applications:

Local governments should submit by mail the required documentation to the department in the following way:

  1. the completed and signed checklist at the front of the application.
  2. CD or USB copy of QTC financial forecasting model and any other soft documents.
  3. hard copy documents (where relevant).

Please note that electronic applications are unable to be accepted by the department due to email size constraints. Local governments are therefore advised not to email the forecast model to the Department as may have occurred in previous years.

The borrowing application, including the financial forecast, is required to be certified by the mayor and the chief executive officer. The certification confirms that the borrowings will be used for lawful, capital purposes and that a native title risk assessment has been conducted on any relevant land.

A project that constitutes more than 50 per cent of a local government's capital expenditure in any one year, or has a value greater than $10 million, should be identified separately in a detailed list of capital works projects as a "significant project" and a brief explanation of the project should be provided.

It is expected that the projects proposed for funding via the borrowings form part of the council's asset management planning process and the whole of life costs of the project have been considered.

QTC Financial Forecasting Model

All local governments are to use the QTC financial forecasting model for the borrowing application. The forecast model is to include five years of historical values (2007-08 to 2011-12) and ten years of forecast values (2012-13 to 2021-22). Local governments which are yet to access the forecast model should contact QTC directly on 3842 4758.

QTC can directly assist local governments with using the model and undertake an informal review of council's model to ensure accuracy and completeness. QTC can also assist local governments with debt structuring.

Assessment, approval and draw down process

The department will assess the financial forecast to determine whether the local government has the financial capacity to meet its proposed loan servicing commitments. The department may request further information to assist in completing the assessment.

If a council significantly revises its financial forecast after lodgment but prior to approval, the details of the revisions should be communicated to the department.

When the assessment has been completed, the department will advise the local government and QTC on the outcome. If the borrowings are approved, the local government may then contact QTC directly to arrange draw down of the borrowings up to the approved amount.

All borrowings will be approved for a maximum loan term of 20 years, however a local government may choose a shorter term.

Borrowings approved in the 2012-2013 financial year will not carry forward to subsequent financial years. Borrowings which are not drawn down prior to 30 June 2013 will be unavailable to the local government in future years. Should undrawn borrowings subsequently be required in future financial years, it will be necessary for the local government to submit a new borrowing application.

Further information

Any further enquiries on this matter should be addressed to This email address is being protected from spambots. You need JavaScript enabled to view it.

The department's postal address is:

Local Government Financial and Funding Services
Department of Local Government
PO Box 15009
City East QLD 4002

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