Budget shock

BRAVE or foolhardy? Time will tell how South Gippsland Shire Council will be judged by ratepayers and what the consequences will be of Council’s majority vote for a budget that flies in the face of its own rating strategy.

The vituperative debate that accompanied the voting in of the Annual Budget 2015-16 with an amendment made in contradiction of legal advice rather took the shine off what councillors generally agreed was a praiseworthy budget.

Among the highlights:

• An average rate rise of 4.9 per cent – less for properties of lower value, more for properties of higher value, broadly speaking. Over the next few years rate rises have been pegged at just 3 per cent – much more palatable than the 5.5 per cent rise of last financial year and necessary given the government’s introduction of rate capping;
• Introduction of a ‘nine monthly instalments’ option for rates payments;
• Increased investment of $500,000 ongoing into the road re-sheeting program to improve the gravel road network;
• $18.48 million for capital works;
• The Aquatic Strategy review to include consideration of community ownership for local pools;
• Marketing and signage of the Rail Trail through a grant to increase tourism opportunities and on-flow to the local economy.

“The rate rise [of 4.9 per cent] continues our efforts to reduce the rate burden,” said Cr James Fawcett. He acknowledged that it was “still considerable,” but said it compared well to other municipalities. The budget, he said, had some important new initiatives. He listed among these the increased investment in roads, the introduction of a green waste collection, the marketing of the rail trail (“one of the great things we’ve done in the last eight years”), and improvements to infrastructure in coastal areas and streetscapes – such as Foster’s – where retailers were doing it tough.

Cr Mohya Davies said it was a “sound budget” and one in which the community had been more engaged than ever. There was a complex balance, she added, between acting on the genuine concern about rate rises and providing the good infrastructure the community wants and needs.

As Cr Fawcett pointed out, however, there were 12 long minutes from when the Agenda item was announced before discussion of the Budget proper commenced, 12 minutes during which the council meeting degenerated into a game of one-upmanship on meeting procedures. The highlight (or lowlight, depending on your view) was when Cr Fawcett succeeded in a motion of dissent against the chair (Mayor Cr Jeanette Harding). She had tried to rule against him introducing his motion on the unamended budget. She favoured allowing Cr Andrew McEwen, seconded by Cr Don Hill, to introduce their amendment.

“The amendment is a direct negative of my motion,” argued Cr Fawcett. He won the battle (but ultimately lost the war as shall become apparent). “This is going to turn into a circus again, courtesy of the councillors across the room,” he added, looking meaningfully at Crs McEwen and Hill.

Crs Lorraine Brunt and Nigel Hutchinson-Brooks added their voices to those of Crs Fawcett and Davies in praise of the (unamended) budget. Cr Hutchinson-Brooks had calculated that the median rates paid in South Gippsland Shire work out at $4.26 per day, which represents, he said, good value for services delivered. “We’re in the right ball park compared to New Zealand and other municipalities,” he asserted.

The four councillors (Brunt, Hutchinson-Brooks, Fawcett and Davies) argued the case for passing the budget without the foreshadowed amendment, Cr Fawcett summing up with a plea to have regard for good governance and the vast majority of ratepayers. Changes to the rating strategy could be made, he suggested, “in the fullness of time”.

It was not to be. Cr Fawcett’s motion to approve the unamended budget was defeated and Cr McEwen moved his amendment.

The amendment in question arose out of a special Council Meeting on June 10, when in response to a submission from a property owner who owned a property of 18.38 hectares, Council voted to extend the special farming rate differential of 70 per cent to include properties that are greater than or equal to 18.3 hectares and are specifically used for primary production – down from the 20 hectares specified in the 2014-18 Rating Strategy. At the meeting Crs Fawcett, Davies, Hutchinson-Brooks and Brunt argued in vain against Cr Don Hill’s motion, which was seconded by Cr Andrew McEwen.

Because of the threatened change to the Declaration of Rates accompanying the Budget, legal advice was sought in the time period between the two meetings, but Cr McEwen was undeterred, and at last Wednesday’s council meeting he moved an amendment to the Budget to include a clause covering farmers on properties of 18.3 hectares. As a sop to the lawyers (who advised against making the change), the land in question is not referred to as Farming in the amendment but as Rural Residential, but the same 70 per cent rating differential is applied, despite the legal advice being that the 18.3 ha proposal was a departure from the currently adopted Rating Strategy and the change lacked strategic justification. Council’s legal advisors noted that the change to the differential land classification constitutes a ‘material’ change to the Budget and Council should consider recommencing the submission process under Section 223 of the Act to minimise risk of a legal challenge.

Cr McEwen alleged it was an anomaly that 44 genuine farmers were not allowed to have the farming rate, while conceding that specifying 18.3 hectares was “probably not the best way” of doing it but was one way of dealing with the anomaly. He said the change would cost the rest of the ratepayers next to nothing.

“This is a motion that restores the farming community’s faith in us, that shows we genuinely care,” he asserted.

Cr Fawcett said it was wrong to assume all 44 landowners in question (those on land measuring between 18.3 and 20 hectares) were genuine primary producers. “When you see a figure of 18.3 ha something doesn’t smell right,” he said.

Cr Hutchinson-Brooks agreed, suggesting that 18.3 was a figure plucked out of the air because of one particular situation and “to pluck a figure out of the air to benefit one property owner is an appalling lack of governance” and councillors were taking “a cavalier attitude”. “We should have a system in which any genuine farmer is looked after,” he recommended.

Citing the legal advice warning against making such a ‘material’ change to the budget, Cr Fawcett railed against the folly of putting a budget at risk through one submission.

He had the support of Cr Brunt. “This is so wrong,” she said. “Cr Hill, you have railroaded what you wanted through without any thought for proper procedure.”

Cr Davies went even further in her condemnation of the actions of her fellow councillors. “I am absolutely appalled,” she said. “It makes Council look very bad. We’ll cop bad press and we deserve it. This is sloppy policy. It gives ratepayers the opportunity to challenge their rates. I feel so frustrated. There is no logic, no strategic justification [for the amendment]. It’s all about petty personal politics and I’m appalled!”

“I haven’t seen any personal politics in this,” retorted Cr McEwen. He and Cr Hill pressed on with their amendment and, with the support of Crs Kieran Kennedy, Robert Newton and Jeanette Harding, got it through.

Cr Kennedy said it was one of the most difficult decisions he had faced as a councillor. Cr Bob Newton described the situation as “a dog’s breakfast” and said he was in some respects unhappy with the decision arrived at a fortnight ago regarding the special treatment for land of at least 18.3 hectares – but voted for the amendment anyway. Cr Harding voted for the amendment, but gave no reason.

Frank and Claire Oostermeyer, the Dollar landowners who put in the submission which opened the can of worms, were in the public gallery and witnessed the vote. Afterwards, they expressed their relief.

“I am relieved that people who were being grossly over-rated are now getting some relief,” said Mr Oostermeyer, who claims his rates have increased by 192 per cent since 2007. “I would like all genuine small property farmers to be given that same consideration,” he said, adding that he would very much like to be part of the next rating strategy review committee.

Comments are closed.