By now people should be aware that council rates in the City of Bayswater will increase by an average 4.95%. That doesn’t concern me; but the use of debt does.
4.95% is a pretty significant rate rise, but with the ABS stating CPI was 5.1% for the 12 months to March (and I’d suggest higher in WA), Bayswater has kept their rate rise to less than CPI. They should be congratulated.
You always need to look behind the headline rate though to assess the real financial position. I’ve previously written a blog article on how rate caps are a terrible idea and will undoubtedly lead to unsustainable strategies in order to cover the funding shortfall, and one of these unsustainable practices is the use of debt. I conclude that the only sustainable way to limit rate rises is to flip your thinking and target expenditure instead of revenue.
Unfortunately, that requires courage. Few elected representatives are prepared to vote for the reduction of services. This is why they should think a bit more before implementing new ones – the great newspaper headline in tomorrow’s fish and chip wrapper brings with it a long term hangover for ratepayers.
When I was first elected to council in 2011, all Councillors were very proud of the fact that the City of Bayswater was debt free. Former Mayor John D’Orazio was largely credited with the focus on reducing debt, and Councillors seemed proud of achieving it.
Unfortunately, on 27 November 2018 the council adopted a Loan Borrowing Policy and opened the door to the use of debt.
As you can see, I voted against this because I considered it obvious that it would ultimately be irresponsibly used. And now, just a few years later, the City of Bayswater will have borrowing of circa $10 million. On 30 June 2021, $ 3,971,802 debt was approved.
On 18 July 2022, $7.1 million debt was approved:
That’s now $11,111,802 debt. Easy to rack up; very hard to pay-off.
But I guess most Councillors will pleasingly consider that a problem for a future council – just keep kicking the can down the road.
Tens of thousands, if not hundreds of thousands, are spent on various forms of community consultation, yet none occurred on something as major as debt. It makes a mockery of the entire system. The Minister, John Carey, should be focusing on the farce of insisting expensive community consultation occurs when producing countless reports/guides/plans, but scant regard is given to community views when these plans are over-ridden, ignored or a massive change in direction is arbitrarily implemented.
Power to the people.