Labor councillors have just supported a budget that will see rates increase by 2.6 per cent and council revenue grow by more than 5 per cent.
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Despite the raising of additional revenue, the forecast is for a massive deficit, the first in seven years.
This comes after ratepayers have endured five years of rate increases, which means many people are now paying almost 50 per cent more in rates since the lord mayor was elected.
If ever there was a time to consider a rate freeze, now would be that time.
Clearly the city is in the midst of coping with the severe economic impacts of the COVID-19 crisis.
The Hunter Research Foundation has confirmed a significant rise in local unemployment.
And many businesses are in survival mode. In the CBD they have suffered multiple shocks due to light rail construction, the nine-week Supercars lockdown and now the pandemic.
That is why independent councillors are also calling for the scrapping of the special business rate, which adds a further burden to struggling small businesses.
Labor's response is to offer hardship provisions, which we welcome.
However, rate deferrals do little for people under financial stress. The day of reckoning is just pushed further down the road.
And can we trust a system where the lord mayor collects these rate and then chooses the winners and losers?
If ever there was a time to consider a rate freeze, now would be that time.
A defence mounted by Labor has been to try to argue that some ratepayers are about to get a tiny decrease due to land valuation changes.
But what they won't admit is that there are many more ratepayers who will pay a much larger increase.
The Newcastle Herald reported recently on the suburbs most affected by increases in land values announced by the Valuer-General.
It is a zero sum calculation - overall rate collections go up 2.6 per cent, and the rates are distributed based on relative valuations across the Local Government Area.
So, for every dollar that rates go down for one property, it is offset by rates going up at another property.
The total doesn't change, only the distribution.
It is time the council took a long look at the cost side of the organisation and worked harder to find savings and efficiencies.
This is not a popular option for this indulgent Labor-dominated council that has a record of spending up big on pet projects and letting significant multimillion-dollar contracts without going to tender.
Who can forget the lord mayor's VIP Supercars lunches costing hundreds of thousands of dollars? The overseas junket for Cr Duncan?
The Port Stephens sleep-overs or the millions of dollars spent on moving administration staff into a rented building in the west end that includes a luxury sixth-floor penthouse office suite for the lord mayor and CEO?
Instead of being responsive to the financial hurt being felt by the community, we have tone-deaf Labor councillors, pushing for an extra 2.6 per cent rate increase, while still slugging many local businesses with the additional special business rate as well.
There is also less transparency, not more, in this budget that is full of photos and infographics, but little detail on where the money is actually being spent.
For instance, there is no way to determine how this budget conforms with the asset spending targets set by the Office of Local Government.
For the first time ever, the Renewal/New Assets split up has been removed from the document, so comparison with asset maintenance targets, including the infrastructure backlog cannot be made.
Why is the council hiding this information, which was always freely available in past budget documents?
Other councils, such as Port Stephens, share much more information with the public.
Their budget papers have four documents that provide good detail in the Long Term Financial Plan, Asset Management Plan (SAMP), Workforce Management Plan as well as the Delivery and Operations Plan.
The Port Stephen's SAMP has 272 pages of information. Newcastle's has just three pages.
Ratepayers should be demanding more detail, not less, so they can properly judge whether council's spending priorities reflect community needs.
And they can also then judge whether yet another rate rise is the only way forward for an organisation that should live within its means like any other enterprise.
Councillor John Church, Independent
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