2026/27 FINANCIAL POLICIES · Attachment 3 - Debt Policy

Attachment 3 – Debt Policy

Debt repayment terms will generally be no longer than 20 years.
If surplus funds become available, and where it is advantageous to Council, one-off loan repayments
will be made to reduce the term of existing loans.

In an environment of fluctuating interest rates, and where there is a distinct economic advantage to
Council, consideration will be given to renegotiating any outstanding loans to obtain the best long-
term benefit to Council.

Repayment Ability
Council will maintain close scrutiny of debt levels to ensure that relevant sustainability indicators do not
exceed the target parameters recommended by Queensland Treasury Corporation (QTC) and the
Queensland State Government Financial Management (Sustainability) Guideline.

Borrowing Sources
Council will raise all external borrowings from the QTC.

Consideration will be given to the provision of loans to business activities and other specifically
identified projects and activities from surplus cash reserves held by Council by way on an internal
loan.

Proposed New Borrowings
Pursuant to section 192 Local Government Regulation 2012, Council must prepare a debt policy each
year that states the new borrowings planned for the current financial year and the next 9 financial
years.

Council’s Proposed Borrowings for the 2026/27 to 2035/36 financial years which total $40.0m are outlined
in the following table.

               Financial          Doonan Landfill         Noosa Main             Total
               Year                and Resource             Beach             Borrowings
                                     Recovery              Seawall
                                      Facility             Renewal
                                       $’000                $’000                 $’000
               2026/27                10,830                                     10,830
               2027/28                11,583                                     11,583
               2028/29                11,699                  2,250              13,949
               2029/30                                        3,620                3,620
               2030/31
               2031/32
               2032/33
               2033/34
               2034/35
               2035/36

Leases
Funding alternatives for asset acquisition also includes leasing. Leases are defined under accounting
standard AASB 16 as a contract for the right of use over an asset for a temporary period of time.

Any low value (under $10,000) or short term (under 12 months) leases are considered an operating
expense. However, all other lease arrangements under AASB 16 are reported as a right-of-use asset
with a corresponding liability in the balance sheet recognised with all other debt and loan borrowing
instruments.

Any lease arrangement greater than $2 million (other than any lease for office premises) is
considered borrowings under the Statutory Bodies Financial Arrangement Act 1982 and will require
prior approval by the Queensland State Government before they are committed.

Council will undertake a lease versus buy analysis before entering into any lease contract.

                                                                                                     Page. 2