MAYOR PREDICTS FUTURE
MOSMAN Park Mayor Ron Norris says residents will face greater future rates rises because his council decided to cut the increase from proposed 4.7 per cent to 2.53 per cent last month.
“The lower rates shouldn’t have any impact on our planned works, but it prevents the rebuilding of our infrastructure reserve funds,” Mr Norris said.
He said cutting other areas of the council’s programs, or asset sales, may be needed to build up reserves, used in preparation for now failed mergers.
Last month, former councillor Colin Chomley said Mosman Park’s proposed rates rise was only surpassed by neighbouring Peppermint Grove Council’s 7.9 per cent, which had been caused by the costs of a historic legal case and building The Grove library.
Councillors accepted Cr Brett Pollock’s motion to reduce by $120,000 the amount proposed to go to reserves in the draft 2015-16 budget and introduce the lower rates rise.
Budget debate followed Premier Colin Barnett’s comments recently that rates rises should be at the CPI of about 2.25 per cent.
Mr Norris said increases limited to CPI would not allow councils to start new projects or replenish reserves affected by the failed merger process. However, Mosman Park will not follow the City of Bayswater in notifying residents their rates will help repay spending on mergers that had not been refunded by the State Government.
Mosman Park claims it can prove it spent at least $150,000, with about $300,000 of notional council staff time.
Bayswater supported joining Bassendean Council, parts of Stirling and Swan councils and Dianella and spent $1.2 million before Mr Barnett cancelled the merger process in February. Bayswater’s 2015-2016 budget bulletin explained the use of rates to recover costs.
Bayswater Mayor Sylvan said he would not speculate if his council’s 3.7 per cent rates rise would have been greater if mergers had gone ahead but he expected ratepayers and rates would have benefitted from “efficiencies and savings” in future years.
RATE capping has been placed on the agenda by the State Government in the past month in reaction to perceived excessive rate rises from some Perth metropolitan local governments.
It has been floated in the past as an idea to place downward pressure on rates. However, the present cap in place in NSW has adversely impacted the standard of community infrastructure.
Management and maintenance of assets is greatly affected, roads and community facilities suffer, and a delay on their upkeep results in more costly replacement later.
Capping rates is a quick and easy way to score political points with the wider community.
However, it does not represent sound financial management, placing massive demands on local government to deliver the many services, facilities, works and projects the community expects and needs but with less money in a tightening fiscal environment.
Local governments are highly responsive to their community needs and the days of the sector being all about just rates and rubbish are long gone.
Managing the long-term financial sustainability of local governments continues to be a challenge amidst the reduction and freezing of Federal grants, as well as increases to State charges such as the waste levy and street lighting costs, which in turn is absorbed by councils.
It is true that some smaller local governments are facing a battle to remain financially sustainable and this has led to higher rate rises, but policy levers such as rate capping also affect the bigger, viable local governments who have effectively managed and maintained infrastructure, services and programs while ensuring rate increases are minimised.
I firmly believe that local government budgeting and rating is a rigorous process that would hold up to any third-party scrutiny but rather than imposing rate caps, the State Government should work together with our sector to achieve positive outcomes for our joint constituents, local ratepayers and residents.
Ultimately, local government scrutiny occurs every two years at the ballot box where electors exercise their right and judge the performance of their council – this is called democracy, not rate capping.
Troy Pickard, Australian Local Government