2026/27 FINANCIAL POLICIES · Attachment 3 - Debt Policy

Attachment 3 – Debt Policy

Financial Services
Loan proceeds will be drawn down subject to cash flow requirements annually so as to minimise
interest expenses.

All lease proposals will be referred to Financial Services for evaluation to assess alternatives for
funding asset acquisition and to ensure statutory compliance.

MEASUREMENT OF SUCCESS

Financial sustainability indicators remain within target ranges, and the provision of necessary
infrastructure is not constrained through the lack of capital funding.

Details of outstanding loans will be reported annually in Council’s Financial Statements and Annual
Report.

DEFINITIONS

Business Activity – A Council activity subject to the application of full cost pricing principles as
defined in the Local Government Act 2009 and Local Government Regulation 2012.

Inter-generational equity – This relates to the fairness of the distribution of the costs and benefits of
a policy when costs and benefits are borne by different generations. (i.e. the principle whereby those
who derive a direct benefit from the service or infrastructure provided actually pay for that service).

Net financial liabilities ratio – This is an indicator of the extent to which the net financial liabilities of
Council can be serviced by its operating revenues. A ratio greater than zero (positive) indicates that
total liabilities exceed current assets, whereas a ratio of less than zero (negative) indicates that current
assets exceed total liabilities and therefore Council would appear to have the capacity to increase
loan borrowings.

Leverage Ratio – This is an indicator of Council’s ability to repay its existing debt. A higher leverage
ratio indicates an increasingly limited capacity to support additional borrowings due to already high
debt levels and/or decreasing operational performance, while a lower ratio indicates the converse.


RELEVANT POLICIES AND LEGISLATION

Local Government Act 2009
Local Government Regulation 2012
Statutory Bodies Financial Arrangements Act 1982
Statutory Bodies Financial Arrangements Regulation 2007
Noosa Shire Council Financial Sustainability Policy


HUMAN RIGHTS COMPATIBILITY STATEMENT

In developing this policy, the subject matter has been considered in accordance with the
requirements of the Queensland Human Rights Act 2019. It is considered that the subject matter
does not conflict with any human rights and supports a human rights approach to decision making by
Council.

This policy should be read in conjunction with the Human Rights Act 2019 (QLD) and Council’s
Human Rights Policy.




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