Attempts by independent councillors to hand Newcastle Now $200,000 for light rail relief appear doomed in the face of opposition from the dominant Labor faction and potential legal obstacles.
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Newcastle Now, the city’s business improvement association, has asked the state government and council to contribute $100,000 each to a $300,000 small business assistance program and asked the council to free up $100,000 of restricted funds held on its behalf. The state government formally rejected the request this week.
The Independents, John Church, Allan Robinson, Kath Elliott and Andrea Rufo, will present a notice of motion next week asking their council colleagues to free up both lots of $100,000 Newcastle Now has requested.
But council chief executive officer Jeremy Bath said on Friday that the $100,000 in restricted funds was off the table because it would place the council in breach of the Local Government Act.
“The Act specifies that such funds can only be used for the purpose for which the rate was levied in our approved annual budget,” he said.
“In the case of Newcastle Now, that purpose is defraying the additional costs of promotion, beautification and development of the City Centre benefit area.
“So, while at a human level I’d like to support the release of the funds for financial assistance, the Local Government Act doesn’t allow me to.”
Newcastle Now’s overview of its assistance program lists four businesses, Newcastle Diggers Club, the Cellarbrations bottle shop, Kerrijon Framing and Newcastle Bridal House, which are facing an uncertain future and another three which have moved.
The council is setting up its own fund offering building owners 50 per cent relief from a special rate levy if they agree to pass on the money to affected business tenants.
Last month, Newcastle Now called on businesses to apply for up to $5000 from its program despite not yet securing funding.
The state government, which is responsible for the light rail works and is facing a class action from traders on Sydney’s tram route, has repeatedly refused to compensate businesses in Newcastle.
Mr Bath said last month that Newcastle Now should use money from its own cash reserves to help traders, a view echoed by lord mayor Nuatali Nelmes on Friday.
“Council is already funding a budget-approved hardship program to support businesses, so the proposal to duplicate this is an enormous waste of ratepayer dollars,” she said.
“Newcastle Now should use their own cash reserves of $412,000 so long as these funds are compliant with the Act and the special late levy purpose.”
Cr Nelmes accused the Independents of doing the government’s bidding by not calling on the state to also tip in $100,000.
