Opinion

A rates bloodbath

Have a guess what your council rates would be today if the Wran Government had not introduced rate pegging 32 years ago. You can start with the fair assumption that in every year, every year bar none, your council would have raised rates beyond the government-imposed ceiling, and the annual groaning and even squealing from city hall leaves that beyond doubt. It's anybody's guess, of course, but mine is, in view of the compounding effect of the extra increases, that we'd be paying at least double, perhaps treble what we're paying now.

Your guess is relevant because all the forces are in happy alignment for the lifting of rate pegging, for councils to be granted again the autonomy of setting their own rates. That is the draft recommendation of a review commissioned by the State Government, and Lower Hunter councils are in full and unanimous agreement! Even the Department of Premier and Cabinet's Hunter office is delighted.

Funny, I say, that when the screws were tightening on councils over those 32 years I heard a great deal about drastic cuts to services but I not once heard even a whisper about drastic cuts to staff numbers. Sure, there's been occasional staff freezes and restructures that have seen off a few managers, and staff cuts when council functions have been hived off to contractors, but I mean staff cuts of the order implemented by the real world when revenue dries up.

And so I wonder whether councils will be more intent on increasing staff or services when the rates lid is lifted.

Senior council officers have told The Herald that if and when rate pegging is ended Newcastle ratepayers face an increase in rates over four years of between 25 and 30 per cent. At least that, I expect, and it will be higher over the following four years.

I'll put my cynicism on display by admitting that I suspect the state government sees unregulated council rates as an opportunity for much higher proxy state taxes in the vein of the current waste levy. I fear a financial bloodbath with both local and state government seeing council rates as a free-for-all. Or is my cynicism misplaced? What do you see as the future for ratepayers?

Posted By: Jeff Corbett on 18/09/2009 6:11:00 PM | Comments (35)

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Thin end of the wedge - Local Government is perhaps and even worse example of waste & mismanagement than its State counterpart - and in NSW that's really saying something. Just look at the noddys who run for office.....

Posted by Scott Hillard, 21/09/2009 10:27:13 AM, on The Herald

Part of the problem is State Gov't pushing responsibiities to Local Council's. State government continually introduces new law/regulation requiring Council's to undertake additional tasks - how do Council's pay for these additional tasks??? The State doesn't seem to contribute too much additional!! The other HUGE problem is the structure of Council departments - there is no benefit in a manager/department director being effiecient or saving money. Managers/senior staff are paid (in part) based on their responsibilty (including the number of staff they manage and the budget of their section/dept) - a manager in Council can argue for a pay rise or bonus based on their responsibilty level, rather than their success in saving money. Why cut staff, reduce expendature?? Also, budgets for next year are determined by how much is spent this year - save money now means your budget will be cut for hte follopwing year (ie punishing departments that spend less) Managers are much better off 'building an empire', spending more money, hiring more staff, having more responsibility which gives them a leg up to the next mgmt level where they once again accumulate expendature and resources!

Posted by King Idiot, 21/09/2009 10:46:05 AM, on The Herald

They need a fairer rates system based on what you earn rather then land values. User pay. Plus the state and feds need to stop off loading services on to local govt - it only makes sense that councils need more money with all of this cost shifting going on

Posted by Westie, 21/09/2009 10:55:48 AM, on The Herald

Pay less rates and get less services from the the council. Its an easy corelation. It does not work on a one to one though! The overheads of council admin can be as much as 40%. So whats the answer? Do you trust them to build art galleries when they cant get a functional bus shelter at every bus stop? The lack of response of each citizen giving a gold coin a week to council for decaying infrastructure (dont you like that description) to me represents a vote of no-confidence in their ability to deliver. The newcastle baths debacle is a reasonable indication. Instead of a demolish and duplicate we had to have a dogs breakfast of unsucessfull strategies put into place and even boats cant last in the ocean let alone a propped up building at the edge of it. None of this is meant to be anything other than reflection of the process and how it may be flawed. Then we may get the occasional flawed manager that helps create the chaos that most percieve is the sucess of their delivery. But whatever the future holds in store one can be sure that nothing can be done without enough money to do it - properly. The normal place to get that money for councils is from rates and charges !

Posted by less services, 21/09/2009 11:15:54 AM, on The Herald

I think Councils should be able to set their own rates if it brings more accountability for councils and councilors to save money. I would also like to seea back to basics approach to councils rather than letting them dabble into everything including the stock market. Go through what the NEEDS are, and budget for them. Take out all the wants and nice to haves and when they can efficiently and effectivly deliver the needs of the community, then the community would be happier to put their hands in their pockets for the wants and nice to have items.

Posted by Nafe, 21/09/2009 11:55:28 AM, on The Herald

Jeff : (1) Your cynicysm in not misplaced. It is healthy and justified. (2) The future for ratepayers includes substantially higher rates ~ for no measurable improvement in anything the Councils do. What's wrong with imposing hard constraints on Councils? IT IS OUR MONEY! It forces THEM to force US to make real economic decisions about what we want for the money. Rates = OUR MONEY. Do we want better roads, or an art gallery? Are we happy to have fewer staff and slower DA approvals? Do we want garbage collected every fortnight, instead of weekly? Let's not behave as though there is an unlimited supply of funds. There isn't. We have to decide what we DON"T want. (3) Let's all go and re-read Animal Farm by George Orwell. (4) As the late and great Kerry packer said so eloquently : "I am not evading tax in any way, shape or form. Now of course I am minimizing my tax and if anybody in this country doesn't minimize their tax they want their heads read because as a government I can tell you you're not spending it that well that we should be donating extra". We should all take that approach to funding public expenditure. The Councils have proven that they are incompetent money managers.

Posted by Abundance, 21/09/2009 11:56:32 AM, on The Herald

Nafe, what country do you live in? It sure isn't Australia, and you DEFINITELY don't live in the Newcastle LGA. Ponder: Dore's Rock, Newcastle Ocean Baths, Town Hall, $250K to audit public toilets(!), Parking policies that destroyed the CBD, Museum debacle, art gallery debacle, sale of old museum site debacle, "energy efficient demonstration house" debacle, garbo outsourcing attempt - FAIL, epic quest to replace the GM, Market St Markets debalce....the list goes on - and you thinking giving them MORE money will increase accountability? Dude, what are you smoking? Time to swing the axe, deliver a rate REDUCTION and increase REAL services - not grandstanding nonsense that panders to lobby groups and those councillors off with the fairies - including those previous ones married to invisible former MPs....

Posted by Scott Hillard, 21/09/2009 12:18:44 PM, on The Herald

Allowing councils to set their own rates is like giving teenage boys whiskey and car keys.

Posted by Jackson, 21/09/2009 12:38:10 PM, on The Herald

I have no problem at all with rate pegging. I do have a problem with cost shifting from the State Govt and the inevitable financial burden that places on us ratepayers. I agree too that the inefficiency within councils needs to be addressed. It should be recognised that whilst a large part of this is a result of having a very heavily unionised workforce. a sizeable piece is from incredibly onerous compliance requirements, particularly in areas such as tendering. I know the purpose of this is to minimise the opportunity for corruption, but frankly i wonder if we'd be better off with a more efficient system that includes an element of corruption than we are with the current massively inefficient system that results in grossly overinflated costs for standard works.

Posted by Perspective, 21/09/2009 12:56:53 PM, on The Herald

Jackson - never let teenage boys near whisky, or whiskey for that matter. Those little blackguards will empty your cellar faster than you can say 'What happened to my Laphroaig!'.

Posted by Abundance, 21/09/2009 1:04:36 PM, on The Herald

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