Run­away rise stirs de­bate

Port Douglas & Mossman Gazette - - NEWS -

THERE has been plenty of con­jec­ture this week over sup­posed 22 per cent rate rises (over four years) for the shire. Below we print two let­ters to the Gazette ex­plor­ing this is­sue.

I am amazed and con­cerned that bud­geted steep in­crease of rates and coun­cil charges has stayed below the radar screen of the vot­ers.

There has been barely a whim­per re­gard­ing this im­por­tant sub­ject from most prospec­tive coun­cil­lors stand­ing for the forth­com­ing elec­tions.

How many vot­ers re­mem­ber back in 2013, that the Friends Of Dou­glas Shire (FODS) made a “low rates” prom­ise to keep rates low and roughly in line with the CPI (ap­prox. 2 per cent). Back then FODS pro­duced a five year bud­get for the new Dou­glas Shire Coun­cil which pro­vides for in­creases in rates and util­ity charges of no more than CPI in each of the five years.

Guess what? At the lat­ter part of 2015 Mayor Leu and the ma­jor­ity of the DSC coun­cil- lors signed off on rate rises of 5.2 per cent ev­ery year for the next four years, un­til 2020.

They also ap­proved a 3.6 per cent in­crease in fees and charges over the same time pe­riod. So what are the im­pli­ca­tions to me the ratepayer. It means a com­bined in­crease in the cost of liv­ing for DSC ratepay­ers over 22.5 per cent.

It would seem the only way to fight th­ese ex­or­bi­tant in­crease is to elect a coun­cil that will deal with in­af­ford­able rate in­creases and charges. There­fore in the in­ter­est of trans­parency I chal­lenge all prospec­tive coun­cil­lors to pub­licly state their po­si­tion in re­la­tion to the pro­jected DSC Bud­get be­fore March 19. The gen­eral pub­lic should be af­forded more de­bate and scru­tiny on th­ese im­por­tant fi­nan­cial is­sues, so that the vot­ers can make an in­formed de­ci­sion on vot­ing day. The Coun­cil adopted its 2014/15 bud­get us­ing a 10-year bud­get strat­egy as a guide.

The strat­egy has set a re­spon­si­ble tar­get to achieve a bal­anced bud­get in the 2019/20 fi­nan­cial year. That is, the Coun­cil will raise enough in 2019/20 to fully fund all of its fore­cast op­er­a­tional ex­pen­di­ture and the costs of de­pre­ci­a­tion of com­mu­nity as­sets.

The new Coun­cil started from scratch on 1 Jan­uary 2014 with no his­tor­i­cal fi­nan­cial ev­i­dence to go by. So far there has been only one com­plete fi­nan­cial year (i.e. 2014/15), from which to draw ev­i­dence as a guide to fu­ture bud­get plan­ning.

From now to 2019/20 the cur­rent bud­get fore­cast no­tion­ally in­di­cates rates rev­enue will in­crease by 5.2 per cent each year in or­der to achieve the tar­get of a bal­anced bud­get by that year. Th­ese fore­casts as­sume costs to the Coun­cil will grad­u­ally rise each year for things like staff wages, ma­te­ri­als and ser­vices.

Th­ese bud­get fore­casts are not set in stone. The Coun­cil has def­i­nitely not made any de­ci­sions that pre­scribe any fu­ture rates in­creases.

This is be­cause costs will vary from year to year and the amount of in­come re­quired from rates, fees and charges to cover th­ese costs will need to be care­fully as­sessed at the time each an­nual bud­get is be­ing pre­pared. For ex­am­ple, in the cur­rent fi­nan­cial year, rates in­creased by just 3.9 per cent even though the fore­cast in­crease was 5.2 per cent. This is be­cause at the time the de­tailed 2015/16 an­nual bud­get was pre­pared, us­ing his­tor­i­cal ev­i­dence from the 2014/15 year, it be­came ap­par­ent that costs had not in­creased to the ex­tent an­tic­i­pated in the bud­get fore­cast.

In ad­di­tion, cost sav­ings were able to be iden­ti­fied.

There are al­ready in­di­ca­tions of cir­cum­stances which may con­trib­ute sig­nif­i­cantly to the Coun­cil re­al­is­ing a bet­ter than fore­cast bud­get out­come in 2015/16. Lower than ex­pected costs of ma­te­ri­als and ser­vices will con­trib­ute sig­nif­i­cant sav­ings.

Staff costs too are well un­der bud­get. The Coun­cil will also re­ceive more in­come than bud­geted this year for things like build­ing fees, li­cens­ing fees and charges, grants and sub­si­dies.

With time the Coun­cil will ac­cu­mu­late more ro­bust his­tor­i­cal fi­nan­cial in­for­ma­tion to en­able it to re­fine its bud­get fore­cast­ing and strat­egy.

The point is the bud­get strat­egy and its fore­casts are a guide only. The strat­egy is not an ab­so­lute pre­dic­tion of things to come and it would be mis­lead­ing and ir­re­spon­si­ble to por­tray them in that way.


The elec­tronic bill­board on Front Street

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