Monday 31 May 2010

Foolish Cairns Council to raise rates 5% in the face of 12% local unemployment

Residents in the Cairns Regional Council area, from Miriwinni in the South, to Daintree in the North, will face an astonishing 5% rate rise, the third consecutive year rates have gone up.

In 2008, the newly-elected Council hiked up rates by 10.5%, and in 2009 by another 8%. The planned increase of an additional 5% this year will bring a increase of close to 25% since this Council took took office March 2008. With increases in services and fees, the actual increase is often another 4%-8% in some cases.
Some senior council managers including councillors, were advocating an 8% rate rise.

One can only imagine if this Council continue on this management path, Cairns and Douglas residents will see a rate increase of well over 40% in the term of their tenure.

Every year Cairns Council has put forward extraordinary increases that far outstrip the Consumer Price Index, a measurement of the average price of consumer goods and services purchased by households. Currently the CPI is just 2.9%.

For the last quarter to the end of March, there were some significant changes in the CPI, namely furniture (-4.6%), fruit (-5.7%), domestic holiday travel and accommodation (-2.3%), audio, visual and computers (-5.9%); whereas fuel increased (+4.2%), pharmaceuticals (+13.3%), vegetables (+10.3%), electricity (+5.9%).

Council's managers, in justifying the recommendations for a rate increase to Councillors, say that the measurement of CPI bears little relevance to a rate increase.

"We can't have anything to do what the CPI is, Council doesn't purchase bread, milk and eggs," a senior Council manager said. "Council purchases steel and gravel and raw materials and all of those things. We're part of that economy, not part of the household purchasing economy."

It's a stupid and unintelligent admission as it shows little understanding of how purchasing is interconnected.

The reality is that Council's senior managers are paid such large salaries, that they are very much removed from the pressures felt by the majority of ratepayers. If the people making the rate recommendations were closer to the average ratepayer or the poverty line that many are experiencing right now, I wonder how keen they would be to put rates up?

Planning Manager Peter Tabulo and manager of water and waste Bruce Gardiner, are on around salaries up to around $240,000 each, whereas the CEO enjoys $300,000. These managers has also had their term contracts extended for five years, something that Deputy Mayor Cochrane rail-roaded through the week before the new CEO took office late last year.

Following the amalgamation, the State Government made every Council promise that they would not sack staff, and negotiate a 4.5% increase to all staff salaries.

It's important to note that the general rate rise percentage does not include increased fee charges for waste, dog registrations, parking buildings, roadside vendors, and access to a number of other Council services, which will also see a rise of at least 4%.
Some former Douglas Shire ratepayers have endured rate rises of 20-30%, and in some cases, over as high as 50%, with their water charges skyrocketed, and many say that local services have eroded, at the same time the introduction of new fees and charges, to bring them in line with Cairns.

Cairns MP Desley Boyle says that rate rises are not due to amalgamation and that "benefits are starting to flow."

"I urged them [Council] to keep focused on the job at hand of bringing more benefits online," Boyle said in State Parliament. "I commend amalgamated councils for the many benefits they are delivering despite the global economic crisis. All levels of government have felt the impact of the global financial crisis including councils, big and small. Their revenue is down, and yet there is, no less, an imperative for councils to keep their capital works program running and jobs flowing," Boyle said last month.

The opposition LNP has made it clear that they favour a policy to de-amalgamate Queensland councils, should they wish. Boyle says this would not only be costly, but was making councils nervous. However Douglas have been unrelenting in this endeavour.

"[This] at a time when they are starting to see the very real benefits of amalgamation only two years down the track," Boyle says. " 'Wind back amalgamation', those opposite are saying. De-amalgamation is their policy and it's back-to-the future indeed. It is most unsettling when councils have led the way in difficult times and are reporting the benefits for all of us in Queensland to see'" Desley Boyle told Parliament.

However Cairns Regional Mayor Val Schier says the shortfall of council amalgamation with Douglas Shire is $1.67 million. Request for compensation was not successful, however the Torres Strait Island Regional Council received nearly $8m. Schier has said there was a $2m cost to merge Cairns and Douglas' planning schemes and accepted that amalgamation costs would have to be found from local ratepayers.

It's a very irresponsible council to welcome in the third consecutive rate rise, on the back of solid unemployment figures that have hardly moved downward in over 10 months. This increase will hit our wallets as electricity prices rise by 13.29% in July, adding around another $200 to the bill.

In light on the tough economic times that so many Far Northern families and ratepayers find themselves in presently, it would not only be a politically smart Council but one that shows restraint and understanding of how people are managing.

When times are tight, and there is less money to go around, what do you do? You cut things from your budget. You say "I won't buy that this time, it can wait." You put expenditure over a longer period for a project or the new purchase you wanted. Why our Council cannot operate its books in a sustainable and responsible way, either holding the rate level steady or even cutting projects, putting their expenditure over a longer period in view of the economic situation, is beyond the reasoning of any intelligent rationale person.

To deliver a budget that not only delivers basic and essential services, but removes excess and puts on hold projects those that can easily wait for a year or two, may be described as a brave council, but I suggest it's a wise and well-informed compassionate council.

I've talked with many small business operators over the last six months, and they're finding this economic situation hurting a great deal, and they all know a number of others that are in the same situation.

People can ill afford these increases at this time. With the scant number of weekly advertised jobs, and, in some cases, up to 400 applications arriving for a basic administration role, the local economic climate is is a very serious state.

The 5% rate increase that is recommended, still needs to be sanctioned by the State Government, and would come into effect from July 1st.

It's time that we say enough is enough and tell this bunch that they no longer have our confidence to manage the books.


Wade said...

i cannot wait for boyleoncairnsass to go.

Al said...

By saying that measurement of CPI bears little relevance to a rate increases, CRC managers are showing scant regard for ratepayers. Most of us have incomes that will only increase by CPI therefore rate increases beyond that index means we must make savings elsewhere to pay them. Why is it that I must within my means yet CRC can continue to ramp up rates year after year because they can't?

observer said...

its very simple really. they might put the rates up this time, but it will be the last time they do it because they won't be sitting in those chairs, come the next election.

Desperate Dan said...

Isn't there a strange disconnect between this news and the allocation of $4m for the reconstruction of Sugarworld which services a very small minority of the population? Slug with one hand and offer cake to a few on the other.

Don't get me wrong, I want to pull
Sugarworld out of the mess it's in as much as the next person but in times of necessary restraint I find the contradiction between the two cases very bizarre.

Tom said...

Wasn't amalgamation supposed to create synergies resulting in savings to ratepayers? What happened?
My pension increases by CPI - and nothing more! Why can't CRC be mandated to keeping rate increases within CPI? I'm forced to manage on my income, and Council should be forced to manage on its.

Wild Art Tiles (via Facebook) said...


Shane Trimby (via Facebook) said...

Your Kidding ......... Let's make Rob Mayor.....

Paul Drabble (via Facebook) said...

I found an interesting thing today one council department spends $3000 a week or $120,000 a year hiring trucks from meteor truck hire, this truck is $80,000 to buy. council waste is getting beyond a joke.

Lazarus Rhodos (via Facebook) said...

the lease Paul is 100% deductable as opposed to capital expenditure ... 80k plus insurance, plus maintanence, plus rego, plus, plus plus ... In your spare time Pauly ... maybe you should do a business course ... hehehe

Paul Drabble (via Facebook) said...

youyr right if you are a private company the council is not a private company. well not last time i looked and you did not take into account depreciation of the asset over its life. you also do not understand that council and private businesses operate under different tax guidelines.

Vicki Jones (via Facebook) said...

It is time that this Mayor and the fools get out of council. People are struggling as it is. More and more home owners jst holding on are going to end up losing thier homes due to the continuos raise in council rates.

Brendan FitzGerald (via Facebook) said...

Bigger Councils are stronger more effecient Councils.. :{

Darren Michael Howie (via Facebook) said...

I'll have to "pull the money out of somewhere", Maybe we can eat minute noodles........................for every meal. Thanks Val, great.

Colin Riddell (via Facebook) said...

council should have to explain in detail all the places OUR money is being spent and I MEAN ALL !

Faye Payne (via Facebook) said...

How many rate rises (that we were not going to have,) have we had now - have a good day Val.

O. Uton said...

Don't worry guys , your pin up boy Kev is planning to make a Messianic return to local politics in the next election to help all the 'big end boys(developers/name your price etc)' of town who have been misplaced by the injustice of a Mayor who actually showed some level of consideration for the ordinary people of this town. The last Mayor who tried that by my recollection unfortunately died in a plane crash up on the tablelands.
I'm sure Kev, with the Murdoch media and the local AM commercial radio station will be able to accommodate your needs as they have done so well for you in the past.

KB :-) said...

Lets kick out all this left wing lot... for telling LIES and talking ROT and WASTING all OUR MONEY out the back door... come on Cairns... Val, Desley and Jim... and we wonder why this great city is moving backwards. Here's hoping that come election time people apply a little commonsense this time around

Gary Holloway said...

Peter Beattie was the one who said it would save council's money to amalgamate. He also said that regional councils were broke. The public didn't think about the fact that the 'richer' councils would pick up the tab for the others when amalgamation happened. It became a great excuse for the council to blame amalgamation for rates rises too. Now Bligh is favouring privatisation of public assets with the lines "we all save"... look at electricity costs woman!