Rate rise unnecessary
THE Warwick Chamber of Commerce and Industry has been at the forefront of the debate over this year’s council rate increase of 9.6%, but more importantly the 40 TO 60% increase on commercial properties.
We believe we have outlined a case against the increase, but more importantly have put an alternative to the increase without cutting services, which this council has said can’t be done.
We are also concerned that some businesses outside the CBD believe this increase is confined to those traders only within the CBD boundary, but it’s not, and all commercial properties will incur a significant increase.
The essence of our opposition to this budget is that the council has told us that the increase is necessary due to the floods.
While I accept there are fiscal pressures from the floods, what I don’t accept is the fact that while business and households are doing it tough and cutting back, this council would seem to have different principles and hence has delivered a business-as-usual budget despite the fiscal constraints of the flood recovery.
We believe the budget should be a “needs over want budget”, which this is not. Paying for flood recovery and escalating costs doesn’t warrant normal budgetary behaviour.
While I have been criticised for being “simplistic”, in my nearly 20 years in business I have never found any financial theory or study that overrides tight fiscal management to get the basics right when things are tough.
Businesses and households know when things are tight they don’t go and put extensions on the shopfront or house, buy a new car or buy the latest technology.
They simply wait until their cash flow dictates it and make do.
We thought it was important that the chamber not just be seen to knock the council for this budget, but to provide an alternative to this rate increase without cutting services to the public.
To remove extensions to Yangan Road and Fitzroy St buildings this year will save $320,000, but save a further $500,000 next year, which importantly is a further 1.5% reduction off next year’s start point of 6%.
This translates into a forecast budget increase of 4.5% for 2012.
While I acknowledge the council will argue the turnover of vehicles more frequently will in the long run save money, I don’t believe this theory works when things are tough because it puts direct pressure on rates.
The council needs to more actively manage ITS fleet during this period and return to “normal” trading when circumstances dictate.
In honesty there are probably considerably more cuts that could have been made without Affecting services, without even eliminating more than $450,000 worth of senseless consultancy on how to keep records or renewable energy use, but the overriding principle is that this scare line that cutting expenditure will reduce services is simply wrong if council sticks to what they need rather than what they want.
The chamber was pleased to see this council commit to Key Performance Indicators (KPI) going forward at the public meeting last week.
While we welcome this and other reviews into efficiency gains, the question needs to be asked why this hasn’t happened before.
It would seem they have been caught napping at the wheel. However, if they are to adopt KPIs, we contest that they need to adopt one to each department head to find a 3% (three cents in the dollar) cut to their budgetary expenditure per year without cutting services, as a bare minimum.