The Mirror News

Rate rise fury

RATEPAYER reaction to South Gippsland Shire Council’s proposed 2013-2014 budget has been fierce. At 25 the number of written submissions is a record for recent years at least, as is the number of people (10) who chose to speak to their submissions at a special meeting last Wednesday.

The submissions have a number of key themes, including lots of support for recreation reserves and bicycle facilities, concern about council expenses and councillor allowances, a request for increased support for arts and culture, condemnation of the proposed introduction of Green Waste Fees, and an argument against fee increases for Food Act registrations.

By far the strongest reaction, however, has been generated by council’s proposal to raise rates next year by 7.5 per cent. Eleven of the written submissions address this issue and five of the ten speakers argued fiercely against such an impost. All the speakers – and the majority who wrote submissions on the subject – are residents of the eastern (Corner Inlet) end of the shire, and several have argued their cases in letters to ‘The Mirror’ in recent weeks.

“We must seek savings by making our operation more efficient, and it is imperative that we effect operational cost savings,” said John McKay, arguing that the shire is “over-managed” and its staff force of 250 plus is too great for a shire population of less than 30,000. “The salaries bill must be reduced, and this should be achieved by reducing the number of management personnel, and possibly by implementing salary levels.”

The management response to Mr McKay does not bode well for any reduction in the shire wage bill. It reads: “Council is party to an Enterprise Agreement that remains in force to 2016. The quantum and timing of salary increases under the agreement is an increase of 4% or $40 per week, whichever is the greater payable September each year.”

Foster farmer Malcolm Davies protested against the proposed 7.5 per cent increase in shire rates for 2013-2014 and the 6 per cent average rate rise proposed for the following four years. In his address to Council, he noted that he had received lots of support from fellow ratepayers who share his views but had not themselves written submissions.

Focussing on the heavy burden rates place on farmers, in particular, Mr Davies asked the shire to consider having “a more equitable and fairer rating system towards farmers by imposing a rate only on houses and buildings and not rating farmland…If this proposal is unachievable then I ask that the Council reduce the differential farm rate to 75 per cent, which would help ease the financial burden on farmers.”

He pointed out that the Victorian Farmers Federation (VFF) had noted in a submission to the State Government in February that the average farmer pays 8.5 times more in dollar terms than residential ratepayers for no additional services.

Council management’s response was that the differential rates have not been adjusted in the 2013/14 Budget, but “Council has identified differential rates as an area of immediate concern” and a new differential could be possible for the 2014/15 financial year. As for the unpalatable rate rise, in a nutshell the excuse was “challenging financial circumstances”.

At the end of retired Foster accountant Lloyd McKenzie’s eloquent presentation there was loud applause from the full (25-30 people) gallery. Mr McKenzie commented in his submission that he supported the concerns raised by Malcolm Davies and Gary Napthine about South Gippsland’s high rates and the foreshadowing of further significant increases. He said any rate increase should be balanced with the community’s ability to pay. “It should be clear to all that raptepayers are really struggling financially at the moment…When times are hard, a very disciplined approach must be taken to pruning back discretionary spending.”

Mr McKenzie said that even with his admittedly limited knowledge of budgeted expenditure at the shire, he could find “examples of expenditure that could be pruned with little negative impact to the ratepayers,” such as the $98,376 proposed to be spent on a project manager for Vision 2050 and “Coal Creek is being continually propped up” and should, he said, be closed down “or pass it over fully to a separate private or community body if they want to run it – with no further cost to the Council”.

“I would urge the council to review its budget with a more stringent test for discretionary spending, to reduce spending and ensure the proposed rates increase is not needed,” he asserted.

Council management’s detailed response to Mr McKenzie foreshadows some chance that Council will rethink expenditure on the Vision 2050 project, which has provoked widespread criticism. “Council may consider deferring the Community Vision to 2014/15…This would require the removal of the project from the draft 2013/14 Annual Plan.” On the matter of Coal Creek, however, the advice is that Council is pursuing a cost-neutral strategy “by developing a feasibility study on further investment to further increase revenue produced by Coal Creek”.

“I feel like a broken record, repeating what others have said,” remarked Waratah North resident Gary Napthine as he came to the microphone after Messrs McKay, Davies and McKenzie. He too took Council to task for its proposed rate rise and queried the need for so many management staff. He pointed out that when he first moved to South Gippsland about 20 years ago the rates were significantly less than what he paid in Melbourne, but now he pays twice what he pays for his property in Camberwell.

“I would question who is actually running the council,” said Mr Napthine. “Is it the councillors or the council employees? Who is deriving the most benefit from the operation of the council? Is it the ratepayer or the council employees?”

Meg Knight was the final presenter on the proposed budget. Her background in corporate finance was evident in her highly articulate speech in which she argued strongly that Council should cut the budget by five per cent and do so by asking hard questions. “Is the service essential? Are we best placed to provide it? Can it be outsourced?”

“Savings can be made,” she insisted, pointing out that hospitals [she used to be the chair of the board at South Gippsland Hospital] had had to make savage cuts when they suddenly lost some government funding, but did so nevertheless, and Target was just that day announcing massive redundancies. She recommended that no money be spent on the Vision 2050 project or on consultancies, and added that Coal Creek should be closed, there should be a freeze on allowances, no discretionary funds for Councillors, a freeze on re-hiring staff, savings could be made on council vehicles, no bonuses should be paid and salaries should – subject to wage agreements – be frozen.

Ms Knight went on to take Council to task for its wasteful spending on tourism and economic development – “full colour brochures extolling the virtues of local towns are a waste of money” – and volunteers, specifically the high costs of coordinating meals on wheels.

“There is lots of work to be done here,” she said. “I and all the others who have made representations will be very disappointed if we come to the meeting on June 26 and find that there has been no change and the rates will still be rising by 7.5 per cent – that is too much. There are savings to be made; it just takes a far more critical eye.”

Written submissions arguing against the proposed 7.5 per cent rate increase were also made by Shirley Westaway, Barry Richards, Bill and Barb Fuller, Michael Giles, Graeme Watkins and Steve Finlay, none of whom chose to speak to their submissions. Too much expenditure on shire officer salaries was a common theme, and several condemned the Community Vision 2050.

Yanakie farmer Graeme Watkins deplored the “exorbitant” rates farmers have to pay and argued that “collection of rates should be based on user pays not property valuation”.

Mr Finlay, of Leongatha, said he wanted a “small local government concentrating on roads, rates and rubbish” and he thought “loss of services for the noisy minority who ‘demand’ them is bad luck”.

Council will take the submissions into account when the draft budget is considered for adoption at the June 26 meeting. The councillors will have to be mindful that if significant changes need to be made then Council may have to undertake more public consultation. This could mean that Council may not be able to meet the legislated deadline of June 30 and would have to apply to the Minister for Local Government for an extension.

All the submissions and management’s remarkably detailed response – with recommendations for Council – can be viewed in full on the shire website as part of the Agenda for the June 12 special meeting.

Council meetings index (link added by administrator)


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