Regular readers of this column will be aware that I often have
a very different perspective on matters to do with Newcastle Council from the
current General Manager, Ken Gouldthorp, whose stridently neo-liberal
managerialist approach grates on my sense of what a community-oriented council
should be.
It didn't surprise me, for example, when Mr Gouldthorp recently
intervened (unsuccessfully, in this particular case) to advocate against
the elected council adopting a Community Engagement Policy.
However, it seems that I'm on a "unity ticket"
with Mr Gouldthorp on the issue of rate-capping and the need to increase
council's rate income.
Mr Gouldthorp was recently quoted in the local media railing
against the decision earlier this month by the NSW Independent Pricing and
Regulatory Tribunal (IPART) to restrict NSW councils to a maximum 2.3% increase
in their general rate income.
Saying that the rate-cap "beggared belief" he
foreshadowed that the council would have to apply for a special rate variation to
exceed the cap, and that this would probably need to be more than the 3.4% granted by IPART last year.
I've reflected before (most recently in my June column) on rate-capping
as a "terrible policy", and "one of the main reasons why
councils around NSW (including Newcastle City Council) are in such dire
financial circumstances."
In that column, I also criticised the lack of any real
commitment (by Newcastle Council or the state government) to conditions set by IPART
on the special rate variation it granted to Newcastle Council last year,
ostensibly for nine projects, many of which have been abandoned.
I don't resile from those criticisms - in fact, I think the
council has created a rod for its own back in trying to win community support
for the future special rate variations that Mr Gouldthorp has recently
signalled as almost inevitable.
Applications to IPART for special rate variations have to identify
the particular things that the council proposes to spend the money on, and
IPART usually decides that any above-cap variation it grants has to be spent
accordingly.
This is exactly what happened with Newcastle Council's successful
application last year, but the nine projects it sought funding for
disappeared as quickly as green bottles hanging on a wall.
As the council builds its case for a further special rate
variation in the next financial year, that track record may well come back to
haunt them.
That would be a pity, because I have no doubt that there's
a genuine case to be made for the extra income.
Since its introduction in 1977, rate-capping has severely compromised
the ability of NSW councils to deliver the services that local communities need.
No other sphere of government is subject to these kinds of
restrictions, and the practice is limited to NSW, where council rate revenue lags
well behind other states.
The cumulative and ongoing financial impact of rate-capping
on Newcastle Council amounts to hundreds of millions of dollars of foregone
revenue that might have been applied to our deteriorating infrastructure
(roads, footpaths, public buildings, parks, etc) and disappearing council services.
I'm sure we'll hear a lot more about this, as the council
gears up its pitch to the community - IPART also requires councils to actively
engage with their community on any special rate application.
Mr Gouldthorp might need to reach for that Community
Engagement Policy after all.
