Friday, March 4, 2016

Black hole envelops Douglas

Gavin King on the Cairns Regional Council budget, Cairns Post 2008: black holes and supernovas

People with black holes where their brains should be accuse me of being too tough on Cr Schier and the council.
So, instead of my opinion, let’s deal with the facts.
It is a fact that your total rates bill will rise by at least 15 per cent.
Cr Schier’s claim that rates will rise by just 7 per cent is misleading and yet another example of a public relations department using spin to mask the truth.
Cr Schier is about to buy a house after some years of renting so she may have forgotten that ratepayers fork out money for a total bill, including all of the fees and charges.
That total bill will be a minimum of 15 per cent higher than the last council rates bill we paid.

Gavin King on the Douglas budget and election, Newsport 2016: Douglas Shire’s great rates fiasco

There are some basic fiscal facts in black and white that nobody can deny, not even the staunchest, most optimistic of Leu supporters.

Under the leadership of Leu, Douglas Shire Council last year signed off on rate rises of 5.2% every year for the next four years stretching out to 2020.

They also signed off on a 3.6% rise in council fees and charges over the same period. That means the cost to dump your rubbish is going up and the cost to run your business in the shire is going up. Even the cost to register your dog is going up.

When combined with rate rises, this all adds to the pressure on your household budget and the cost of living in Douglas.

On paper, it’s a combined increase in the cost of living for Douglas ratepayers of nearly 9% every year for at least the next four years.

Let me repeat that. Rates, fees and charges are predicted to rise by nearly 9% every year. For the next four years.

Apart from other similarities can you spot the very basic numerical 'mistake' evident in both? What King had done in 2008 was cumulatively add the percentage increases of the council rate components  and abolition of the early discount to derive a percentage increase a multiple of the actual outcome.  The stated 15% minimum "fact" for all ratepayers was in fact probably unachievable even as a maximum for any single ratepayer with a significant property revaluation. My own rate increase that year was approximately zero.

The Post and King were made aware of this so it all but defies credibility that this is exactly the same mistake of kindergarten innumeracy repeated in King's latest effort at Newsport? The percentages again appear to have been added cumulatively to derive a "combined increase" of 9% (rounded) which would be approximately double the actual annual percentage increase.

King has pointed out that the Douglas rate increases are well in excess of inflation. However perhaps a comparison of rates increases and CPI should also be done on a consistent comparable basis. The ABS provides a breakdown of CPI components.

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Sep Qtr 2015 to Dec Qtr 2015
Dec Qtr 2014 to Dec Qtr 2015
Weighted average of eight capital cities
% change
% change

All groups CPI
Food and non-alcoholic beverages
Alcohol and tobacco
Clothing and footwear
Furnishings, household equipment and services
Recreation and culture
Insurance and financial services
CPI analytical series
All groups CPI, seasonally adjusted
Trimmed mean
Weighted median

If we apply the cumulative innumeracy method of King we would add up the change in all those components for the year and derive a CPI of 19.3%. Sheesh with rates increases at just 9% no wonder Douglas has a budget problem!

*disable sarcasm font here*

Sadly this only detracts from a real issue of underlying fiscal weakness in Douglas and sustainability of the budget as well as the opacity of the Leu council with regard to that. The commentary referenced from Conus at the Newsport post appears to be valid constructive criticism on this and also consistent with previous comment here at Loose Change: De-amalgamated Douglas Shire

Update: The Newsport post has since been updated and edited to remove the innumerate 'mistake'.

Update: 4CA; Where does this 22% come from? Oh dear!

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