Why I decided not to support the proposed rate increase
I need to say from the outset I’m not afraid of making tough financial decisions in council, even if they are unpopular, but only when it’s absolutely necessary, the simple fact is the special rate variation approved by Council last week(10/2/17) wasn’t absolutely necessary.
Every time we make a rate increase, it shifts money around our local economy, Ballina Shire Council’s total revenue is 7.5% of the shires GDP so whatever change we make can have a drastic effect across our local economy, any significant changes in the money our council collects or spends can affect our economy in both a positive and negative way, this is why we need to be extremely diligent in how we review and approve special rate variations.
After due diligence, I decided not to support the rate rise for 5 straight forward reasons:
– I read every single submission and the majority view was blatantly clear. One of the most consistent messages to come out of the last election was community consultation and an overall feeling that council is not listening. Many people in the shire have lost faith in council’s ability to listen. 90% of responses received from the consultation process were against the rate rise, but what was more concerning was the number of comments that suggested “Council will just do what it wants anyway, you probably won’t even read this”. Council has an obligation to restore some faith in our consultation processes.
– We haven’t completed our end of the bargain on the last rate increase. Our last special rate increase was for the Ballina and Alstonville Pool upgrades, we haven’t even completed these, people haven’t seen what they got for their last increase, council needs to demonstrate that we are completing our end of the bargain to build trust in the Special rate variation process.
– People have less money. This rate increase is one of the least affordable we have done since the last two Special rate variations. From a macro economic perspective, real wages are flat and have been for the last year or two, consumer spending is down, the Australian economy contracted last quarter, and payments such as pensions are increasing less than inflation i.e. 0.9%. All of this means ultimately, any rate increase in the current economic environment takes money away from our local economy i.e. our local businesses and potentially affects peoples jobs/hours, or worse still, people with restricted budgets will be put in a situation that they have to choose rates over medical or educational expenses. If council is going to do that, it better have a damn good reason to.
– $300K won’t fix the Richmond River. I spent 4 years on Richmond River County Council, like many I’m passionate about the river, but our council contributed 200k towards a SCU Blackwater study with RRCC and while it provided good data, it’s primary outcome was keeping university professors employed, we spent 400k and haven’t even completed one physical action towards helping the river. The Richmond river requires a regional approach and it requires Rous county council to actually demonstrate some serious leadership. The merger of the county councils was supposedly going to save 200K a year, Rous has got the money and needs to step up and take leadership on this regional issue.
– Ultimately, at least this year, it’s not absolutely necessary. While I don’t subscribe to Jeffconomics (Contrary to Jeff’s lack of understanding, Council doesn’t have 60 million sitting around to spend, our actual unrestricted capital is around 1-1.5% i.e. the money we actually have available to spend on things that aren’t locked in). It needs to be clear that the rate rise for this year isn’t absolutely necessary, council is able to achieve its objectives i.e. get closer to fully funding depreciation and to work towards discretionary projects without a special rate variation. The bottom line is when council has the scope to re-allocate close to a million dollars to do works at Lake Ainsworth that the majority of the community don’t want, we cannot arguably justify we don’t have enough money to do things we would like to do, we do have the money it’s just council has decided to give priority to other pet projects.
Finally, I need to state that I strongly supported the Special rate variation in 2008, because council did need to catch up with its rate base and I was somewhat supportive of the pool upgrades, but the current SRV isn’t justified in my view given the community feedback, current economic environment and the simple bottom line that we do have other options, we cannot justify this increase as absolutely necessary.
P.S I should also add both myself, and former Councillors Paul Worth and Keith Johnson also independently came to the same conclusion, I think that says a lot and provides some perspective on the different approach of the new council.
Cr Ben Smith