Financial sustainability ratios

Financial sustainability measures indicate whether Council is operating in a financially sustainable manner. As shown below, for 2021/22 Council is within range for one of the three financial sustainability ratios.

In accordance with section 178 of the Local Government Regulation 2012, Council tracks three measures of financial sustainability. These measures are: Operating surplus ratio: indicates the extent to which revenues raised cover operational expenses only, or are available for capital funding. Asset sustainability ratio: approximates the extent to which infrastructure assets managed by Council are being replaced as they reach the end of their useful lives. Net financial liabilities ratio: Indicates the extent to which the net financial liabilities of Council can be serviced by its operating revenues. The target range for the financial ratios is set in accordance with the Department of Infrastructure, Local Government and Planning Financial Management (Sustainability) Guidelines 2013. The following tables show actual historical ratio values for the last three financial years. Forecast ratios for the next nine years are included in the Long-term Financial Sustainability Statement in the Financial Statements included in this report.

Operating surplus ratio

Target 2021/22 2020/21 2019/20 2018/19 Explanation of 2021/22 result

0% - 10% -79% -112% -87% -55% There has been an increase in sales for contracts and total recoverable works and an increase in operating grants revenue received. Depreciation and amortisation is a non-cash allocation of asset consumption of $47.5M.

Table 4: Operating surplus ratio historical four-year performance trend