CPA Australia calls for broader focus on financial sustainability in Queensland local government

Australia’s largest accounting body, CPA Australia, has urged the Queensland government to broaden its focus beyond the accounting for depreciation of fixed assets and address the wider issue of financial sustainability in local councils.

In a submission to the Queensland Local Government Depreciation Taskforce, CPA Australia said that while depreciation is an important accounting measure, it should not be viewed in isolation when assessing the financial health of councils.

The call comes amid growing public concern following reports of a $30 million depreciation error by Sunshine Coast Council, which contributed to a $20 million budget deficit and sparked scrutiny of financial governance across Queensland local government.

“Depreciation is just one factor in the complex equation of asset management and broader financial sustainability,” said Ram Subramanian, Financial Reporting Lead at CPA Australia. “It reflects the consumption of assets over time, but it does not in itself directly drive decisions about asset replacement or maintenance. 

“Councils need to take a more holistic view that includes real-world asset data, service delivery needs and demographic pressures.”

Mr Subramanian added: “What we’re seeing is a need for stronger cross-functional collaboration between finance and other teams such as engineering, and for councils to invest in the right competencies and systems to support accurate financial reporting. Errors in depreciation can have serious consequences – not just for budgets, but for public trust. 

“That’s why we’re advocating for a centralised framework and guidelines that drive consistent practices across councils to help navigate these challenges with confidence and clarity.”

CPA Australia’s submission recommends a strategic, state-wide approach to asset management, improved skills and capabilities within council finance teams, and more accurate accounting practices. 
It also calls for councils to consider broader sustainability factors such as climate change, population growth and infrastructure demand.

“The Queensland public sector is a global leader in financial reporting transparency,” Mr Subramanian said. “To maintain this leadership, councils must ensure their financial reports are prepared and interpreted by professionals with the right expertise. This includes accountants, asset managers, valuers and assurance providers working together to deliver accurate and meaningful financial information.”

In addition to consistent guidelines, CPA Australia also highlights the need for robust practices around asset valuation, componentisation and useful life estimation, and suggests exploring a centralised support model to help councils implement best practices.

“Financial sustainability is not just about balancing the books,” Mr Subramanian said. “It’s about ensuring councils have capacity to deliver services, maintain infrastructure, and respond to future challenges. A narrow focus on depreciation risks missing the bigger picture.”

Media contact

Simon Downes, External Affairs Lead
[email protected]
+61 0401 461 503