South Gippsland holding carryover cash for future works

WITH council budgets stretched to breaking point South Gippsland Shire has revealed it is holding $2.16 million in carryover cash for unfinished projects from 2025/26.

South Gippsland is on track to deliver more than 70 per cent of its planned capital works program but the timing of the works has extended the amount of cash carried over from year to year.

The draft 2026/27 capital works budget has been described as a measured and financially responsible program shaped by a challenging global environment.

South Gippsland Shire said the planned works program reflected a deliberate focus on what was achievable within a constrained construction market.

Council claimed it had a strong track record of getting projects done.

South Gippsland Shire said it had secured $8.3 million in grants maximising investment in the community while reducing the burden on ratepayers.

This demonstrated a strong commitment to responsible asset management, with approximately 90 per cent of investment directed towards renewing and maintaining council’s extensive asset base according to South Gippsland Shire.

Like many organisations council said it was operating in a construction environment impacted by cost escalation and material shortages. These conditions may affect delivery timeframes, and some projects may extend beyond the current financial year.

Projects most exposed to these pressures are typically those reliant on fuel and oil-based products such as road works, heavy earthmoving and building materials. These challenges are not unique to South Gippsland and reflect broader industry conditions.

Council said it was actively managing these risks by carefully prioritising works and maintaining flexibility within the capital works program to respond to changing circumstances.

“We will continue to keep the community informed on progress and adapt as needed to ensure every dollar is spent wisely and delivers real outcomes. Changes in liquidity reflect normal cash flow timing and council remains in a sound financial position.”

South Gippsland Shire Council said the ability of council to  deliver its capital works program at the budgeted cost was an issue being encountered sector wide.

Council said this was not a short term issue to be managed within a single annual budget. It materially affected council’s ability to plan ahead including the need for realistic lead time assumptions and contingency settings across a ten-year horizon.

Grant funds and developer contributions to local government are often carried over from year to year for incompleted projects.

International supply chain constraints and fuel related input costs continued to influence pricing, reducing domestic capacity limits and further elevate risk.