Monday, July 23, 2012

Cairns Regional Council Budget

Cairns Regional Council has released its budget for the 2012/2013 financial year.  Without any analysis there doesn't seem to be too much of interest really, but should play defensively on a spinning pitch until time allows more detailed consideration! Regardless, the operating position is such:

Mind you, the Mayor's speech can only be regarded as somewhat testy and  includes:
It is important for Council in the foreseeable future to start to consider a four-year budget strategy in order to build some discipline around where this term of Council is to take us all. The alternative will lead to a less than optimum outcome.
The current budget preparation has been a somewhat disjointed affair, with the Local Government elections being pushed back a month to accommodate the State elections, thereby leaving too short a time for proper consideration, and then this was compounded with an all too busy and extended Board induction process.
I am not aware that four year budget strategies, and forward estimates, have produced anything beyond misguided propensity for media manipulation and spin? They have more usually become a tool for propoganda by all political parties.

However, I completely agree on the last point. The elections being pushed back a month, also pushing the budget back a month is no different to the last Council. I had cause on an unrelated matter to have a meeting with previous Mayor Val Shier following her election and the same problem existed.

The timing of electing a new Council immediately before having to approve a budget is just stupid? This was well known and the previous Bligh governement failed to act on the bleeding obvious. Moving the Council election was widely proposed but never happened. The biggest problems of the amalgamations is that they were sold as reforms which they were not.

That resulted in the infamous unpromised rate increases after the unlamented Byrne council had failed in matching its cost base with rates policy in its final budget, presumably for entirely political reasons? Rates will always be the most prominent issue of any Council budget and a fave obsession here at Loose Change.

I do have an extensive analysis of this in process if only disaggregated excel files can be aggregated. The 3.7% average rate increase will deliver some anomalous outcomes given divergent valuations. Gordonvale is a winner after distressed receiver sales hammered valuations down 20%. However, I hope there is some understanding in Gordonvale that this will likely be reversed in coming years? The minimum rate increased 3.7% which may include most typical Gordonvale residential properties anyway.

This budget has increased the land value rate for residential houses by 7.6%. Your rate increase will depend on how your valuation was relative to that or whether you are below the minimum rate level. On my own turf the Council responded to plummeting valuations on higher density unit land by hiking the rate payable by 23.9%. That will leave me about line ball with the valuation fall and an almost equivalent general rate component to last year.

However, what a higher rate also does is increase the anomalies. I am aware of units in Trinity Beach which will now be hit with a 14% increase in general rate component while adacent units do not. As previously suggested here the old Park Regis (next to Rydges Esplanade) gets a rate hike while Aquarius gets a cut. That is despite Park Regis owners already paying higher rates than Aquarius.

Situation normal! Ignorance triumphs!

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