Your front page report in the Port Macquarie Independent (June 16, 2011) on the coming Council rate rise states that the Independent Pricing and Regulatory Tribunal (IPART) approved a special variation to Council’s general income of 10.1 per cent for 2011 – 2012. The report continues: “For the average ratepayer, this will equate to an approximate rise of $24 for the 2011 — 2012 financial year”.
Council’s submission to IPART clearly states that a rise of 7.5 per cent would equate to a $70 increase in average residential rates (and similar for the business community). Now, applying a little arithmetic, 10.1 per cent would equate to approximately $94. Can someone explain this apparent discrepancy between $24 and $94?
IPART levelled some serious criticisms at Port Macquarie-Hastings Council before final-ising its decision on a rate increase. It said:
“… There is support for the proposed expenditure from the community engagement and strategic planning process. However, it is less clear whether Council has explored all alternative funding options. We note, for example, that rather than borrowing to fund additional capital expenditure, Council is planning to reduce its level of debt over the next few years.”
The Council has presented only limited evidence of community support for the requested rate increase. A community survey on the requested rate rise was not undertaken. Council’s communication, including media releases, did not always disclose the cumulative dollar impact of the requested 22.3 per cent rate increase by 2012/13.
The requested rate increase is substantial and would be expected to result in Council’s residential rates being above that of similar councils and the state average. Relatively low average income levels also raise concerns over the community’s capacity to pay the special variation.
The Council’s strategy of rapidly reducing debt over the next 10 years increases the reliance on rates as a funding source for capital works with negative effects on intergenerational equity.
Patrick Lee
