Response from city regarding ‘Geraldton may have to pay back $9 million’

Letter to the Editor

In response to your article today ‘Geraldton may have to pay back $9 million to the federal government’, I would like the opportunity to provide some clarity around the commentary. 

The Karloo Wandina Project involved building Verita Road, Abraham St Bridge, the Ackland Street to Abraham Street connection, the extension of Columbus Boulevard, as well as water, electricity and sewerage infrastructure to enable the further residential and commercial development of the area.

At the time this project was approved Geraldton was experiencing strong growth but there was a shortage of available residential land, and house prices were becoming unaffordable for the average resident. 

The Federal Government’s contribution of $9 million was made on the condition that 400 affordable housing lots would be sold by the Department of Housing by June 2016, this date was later extended to June 2017. 

At the time, the Department of Housing were selling 80 affordable housing lots a year and there were no indications that this demand would wane. Put simply, selling 400 lots was not seen as a difficult target to reach as the residential housing market was booming and all indications were that it would continue to boom for some time.

The City of Greater Geraldton’s predicament is that we have spent the funding to build the required infrastructure but the Department of Housing will not be able to sell the required lots because of the significant downturn in the local residential property market.

The Federal Government has recently advised us that they are considering policy changes that may require the City to return the funding if 400 affordable housing lots are not sold by the Department of Housing by December 2017.

The City and our community does not have the capacity to repay the funds and have asked the Federal Government to provide a reasonable extension of time to suit our local market conditions. To date we have not had a response.

We have also had a number of discussions with the Department of Housing and have called upon Melissa Price, the Member of Durack to provide assistance on our community’s behalf. 

This is a ridiculous situation for our City to be put in. We have spent the money building the infrastructure that was required but because the residential housing market has collapsed and the State Government can’t sell the lots – the Federal Government wants us to pay it back.

We have a good relationship with Melissa Price and will continue to work closely with her to convince the Federal Government Policy makers to reconsider their position.


-Ken Diehm, City of Greater Geraldton CEO

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