2008-2009 Annual Budget Speech for Cairns Regional Council as given by Mayor Val Schier
IT is a great honour to deliver the 2008/2009 Budget for the newly amalgamated Cairns Regional Council, and as you are all aware, my first Budget since becoming Mayor.
Today’s Budget announcement falls just four months since the March 15 local government elections which created our new local authority.
There has been great anticipation in our newly merged community about how this council goes about its business of setting rates and prioritising infrastructure, all while delivering capital works and essential services such as water, sewerage, garbage and recycling.
There has also been much speculation in the media about double digit general rates increases and this has caused some people to be fearful.
This budget does deliver a rating increase for the majority of ratepayers, however, for some, especially in the former Douglas Shire area, there will actually be reductions.
In developing this Budget the Council was charged with dissolving budget operating deficits inherited from both former Councils. In the case of Cairns it was $8 million and for Douglas Shire it was $1.7million.
This financial position is not a sustainable one for any local authority and independent Queensland Treasury advice supports this assessment.
This means there has been considerable challenge in consolidating two sets of books, and producing a balanced budget which will ensure we will move forward with confidence.
The financial sustainability of our Council is our primary focus now and into the future and will help us realise our commitment to ensuring this region’s success.
PREPARING THE BUDGET
Myself and our six other new councillors have worked extremely hard and explored a myriad of serious issues through briefings and workshops with senior managers.
Throughout this process, I have been supported by the four experienced councillors, and I thank Councillors Gregory, Cochrane, Blake and Bonneau for their professionalism and wise counsel.
The budget setting exercise has seen all councillors collaborate to bring about the most equitable outcomes possible for our new community, which of course now extends from Bramston Beach in the south to Bloomfield in the north.
This needed to be a budget that considered the pressures on each element of our diverse population - cane farmers, beach dwellers, pensioners, small businesses, families, tourist operators, new home owners and self-funded retirees.
It has been a challenging task and I would also like to extend my thanks to our Council Officers as well as each of our Councillors for their hard work and input into this our first budget, as a newly created regional council.BUDGET BUILDING BLOCKS
One of the most diverse and significant businesses in the region, the Cairns Regional Council operates under an annual budget of $252 million.
In framing our incoming budget the following considerations have been taken into account.
Firstly, the Consumer Price Index increase is 4.8 per cent, an amount which is actually less than the Local Government Index which takes into account additional costs impacting our operations such as construction.
An independent analysis of construction price movements in Queensland has shown an average increase in construction costs of 6.5 per cent.
As each person in the community who drives a vehicle can well appreciate, fuel costs have climbed by more than 13 per cent.
Electricity is up 8 per cent and for the Council this shift adds an additional impost of more than $500,000 to our operating expenditure.
Steel costs have also dramatically increased – 84 per cent since last September - and this has had a significant impact on the costs of delivering our many critical works projects.
Secondly, this is the year we begin upgrades of our four main sewage treatment plants, under the Cleaner Seas Initiative.
While these plants are an investment in the health of the Great Barrier Reef – our greatest asset - and make available high standard recycled water for outside use in new housing developments and other applications, it will cost us $127 million in this year alone.
A proportion of this funding - $12 million - has been raised through the Cleaner Seas levy, implemented under the former Cairns Council. Planning will also begin for the upgrade of the Mossman Waste Water Treatment Plant, to occur within the next five years.
Thirdly, in a new initiative, we have taken the step of fully funding the depreciation of all Council owned assets.
This strategy will enable us to better plan for the future maintenance and replacement of Council’s assets: our libraries, swimming pools, playground equipment, footpaths and roads, as well as the vehicles that we need to deliver daily services.
Finally, we have taken into account new State Government valuations for land in Cairns and the former Douglas shire, which has had its first revaluation since 2005.
Councils across the State are obliged to use these values in setting their general rate in the dollar. When valuations fluctuate widely - as they have on this occasion with a small number of increases in the order of 300 per cent - it can be difficult to strike an equitable balance.
Council extensively debated over whether to continue to offer discounts for early rates payments, a practice which has been progressively phased out by most councils and utility providers across the nation.
In its assessment of this practice, the Council determined that the people who most need financial assistance are among the 20 percent who are unable to pay their rates early.
This year, as part of our fiscal strategy, the discount policy has been dissolved.
SIGNIFICANT CAPITAL WORKS
I now move to the announcements that people are waiting for. I am pleased to advise that the Council will move forward with a significant works budget.
More than $10 million to upgrade and reseal various roads
$1.8 million for the Lake Placid/Caravonica flood mitigation scheme
$1.7 million towards joint sporting facilities at St Andrews School, Redlynch
$3 million to replace our ageing water pipes and extend mains.
$2.8 million to improve traffic flow adjacent to schools on Redlynch Intake Road
$2 million to design, construct and refurbish reservoirs, including those at Bartle Frere, Bellenden Ker and Fishery Falls
$1.5 million for cemetery land
$2.75 million for the Catanna wetlands redevelopment at Smithfield
$1.4 million for new and replacement kerb and channelling.
$1.2 million towards flood proofing road access to Yorkey’s Knob
$750,000 to complete the installation of a glass crusher and a paper sorter, and to upgrade equipment at the Materials Recovery Facility at Portsmith
$586,000 will be invested in the upgrade of the Mossman Wastewater Treatment Plant.
And there are the smaller ticket items which will make a real difference to local amenity:
$300,000 for resurfacing toddlers’ pools at Smithfield and Woree.
$250,000 for renewal of playground equipment.
$500,000 for new cycle ways and footpaths
Our northernmost residents will benefit from a $250,000 investment in the upgrade of Coopers Creek crossing on the way to Cape Tribulation
$110,000 will be used to plan and design water and sewerage infrastructure in Division 10
$200,000 will go towards planning and design of recycled water systems, including $150,000 for planning a supply to the Botanical Gardens.
$130,000 will be spent on upgrades and improvements to SES buildings to ensure they are able to best meet the needs of our community.
More money will be directed towards new sewer pump stations, flood mitigation, replacing water meters and undertaking all of those things that ratepayers expect us to do.
Details of these projects are in the budget pack and councillors have information on what is proposed for each division.
BOOST FOR TOURISM, ECONOMIC DEVELOPMENT
I referred to the economic uncertainty in my introduction and the Council has considered ways that it can help drive economic development in the region.
Critical to this is the support of our local tourism industry and measures to grow the economy and to build our arts, culture, sport and recreation capabilities - activities that proclaim us as a vibrant destination for our domestic and international tourists.
Significantly, these activities also improve the quality of life of the 150,000 people who live in our region.
The Council commits:
$460,000 for Tourism Tropical North Queensland to promote our region’s unique qualities both nationally and internationally at this critical time
$430,000 towards Port Douglas Daintree Tourism to promote and market this very special part of our region
Advance TNQ will receive $250,000 to assist in economic diversification and other activities to grow our economy
We acknowledge that festival and events provide significant economic benefits for the region and commit to $400,000 for the staging of festivals and events across the region: these include
$250.000 for the 8th Festival Cairns
$65,000 for Port Douglas’ Carnivale
For sports, arts, community and cultural services this year:
Community groups will be pleased that $400,000 has been set aside to maintain our community halls and facilities
$4 million will ensure the Tanks and the Botanic Gardens redevelopment will continue as per our staged plan
The Stratford library facility will go ahead with a $1.5M allocation
$11 million as previously announced for the purchase of land for sporting purposes at Edmonton, in addition to an extra $950,000 towards more sport and recreation facilities renewal across the region
There will be $230,000 for community and cultural development grants and in-kind support to community group, and
$185,000 in sports and recreation grants, including in-kind support, to various community based sporting and recreational organisations
$190,000 is set aside for various improvements to the ageing Cairns Civic Theatre.
$810,000 towards operational costs of the Cairns Regional Gallery.
$102,000 in regional arts development programs supported by the State Government.
How will we go about raising the revenue that we need to deliver on our budget promises?
CLEANER SEAS LEVY
The “Cleaner Seas” levy will cost each residential property owner $75 this year, up from $51.20 for residents in the former Cairns City Council area.
This means an increase of 50 cents per week, while in former Douglas Shire, the combined sewerage and Cleaner Seas charge will add 20 cents each week to the household bill.
For commercial premises the Clean Seas charge will be $44 per toilet.
GENERAL RATES AND CHARGES
The Council has worked hard to bring all general ratings categories and fees and charges together across our region to ensure everyone is contributing to the cost of services as equitably as possible.
The minimum general rate will rise to $650 for the entire local government area, up from $625 in the former Cairns City Council area, and up from $633.60 in the former Douglas shire.
About 50 per cent of ratepayers will pay no more than $650 in general rates this financial year – an increase of $1.08 per week for former Cairns City Council residents and 32 cents each week for former Douglas Shire residents.
This increase is less than the cost of a loaf of bread a week and I know that many pensioners and low income earners will be relieved to hear that the media’s double digit predicted increases were not accurate.
Strata title units – 16,304 property owners will pay a minimum general rate of $645 - or an increase of $27 from $618 last year
70 per cent of flat owners will pay 1.5 times the minimum general rate of $975 per year – an increase of $37.50 up from $937.50 last year.
For the purposes of setting the rural rate, three distinct growing areas have been recognised – Babinda, Mulgrave and Mossman.
The rate in the dollar for Rural Productive properties was set to gain a 3.8 per cent increase across all three different rural categories.
Council has maintained banding across several residential categories to reflect the new valuations, which means at the top end of the scale no ratepayer will pay more than 10 times the minimum general rate in their band, despite the $multi-million value of their property.
Across the residential bands we have remodelled to gain an additional general rate revenue yield of 7.09 per cent; that is a 7 per cent overall rate increase, and this includes the removal of the discount. For the commercial sector this is 8.4 per cent.
REPEAT: That’s a 7 per cent overall residential general rate increase, not the 11 per cent mooted across various media outlets.
PENSIONERS TREATED FAIRLY
The pensioner cap in our region is very generous and amongst the highest when benchmarked against all other councils across the state.
The pensioner rate remission will be set at a cap of $1,350, and will also be extended to cover the former Douglas Shire area for the first time.
This remission will be made available for all eligible ratepayers, up to a maximum of 40 per cent of the general rate.
Last financial year, more than 4,400 pensioners were eligible to receive support under this remission scheme.
The State Government has a pensioner remission initiative capped at $180. This rate was set in the early 1980s and has not changed since. The State Government needs to address this issue for pensioners in Queensland.
RATES RELIEF AVAILABLE
The Independent Rates Relief Tribunal has been maintained to adjudicate for all those residents in any of the residential categories, who believe they have a legitimate case for rates assistance.
This tribunal is confidential and works with those suffering hardship to give them time to pay.
We will be making it easier for direct debits to be organised so that fortnightly or monthly payments can be made to ease any financial burden.
WASTE MANAGEMENT
The residential cleansing (household waste and recyclables) charge this year will be $261.38, compared with last year’s $247.68 in the former Cairns City, and $256 in the former Douglas Shire – increases of $13.70 and $5.38 respectively.
This means former Cairns city council ratepayers will pay 26 cents extra each week and former Douglas ratepayers 1 cent extra each week in cleansing charges.
The total cleansing capital budget for 2008/09 is $1.5 million.
WASTEWATER CHARGES
Council has set this annual wastewater (sewerage) charge at $480.00 for each residential property for former Cairns City Council residents.
For commercial premises this charge will be $454.52.
This charge actually represents a gross saving for the residents of the former Douglas Shire of $18.
Former Douglas commercial charges will be $2.02 per unit, up from $1.91 per unit.
The total wastewater capital budget for 2008/09 is $164.7 million.
HOUSEHOLD WATER CHARGES
The greening allocation for every residential property of 45,000 litres will not apply from this financial year as Cairns Regional Council works with the community and the State Government on water demand strategies designed to minimise waste, improve water efficiencies and reduce overall consumption of this finite and precious resource.
The costs per kilolitre will rise 10 cents to 82 cents.
By way of comparison, ratepayers of Logan city used to pay $1.43 and this climbed to 1.82 per kilolitre, while the Gold Coast has increased from $1.45 to $1.57 and Ipswich from $1.75 to a staggering $2.14 per kilolitre.
The annual access (delivery of fresh, clean safe water to every residence) has been set at $182.52 for all residential and commercial in the former city council area.
The commercial water usage rate has been set at 98 cents per kilolitre (1000 litres).
Former Douglas Shire residents will now pay the same access charge and the same cost per kilolitre charge as other ratepayers in the region.
Under this formula, they Douglas ratepayers will have to use more than 240 kilolitres each year before they pay a single cent extra than they did last year.
Through reducing water use, customers are able to save money on their water bills.
It should be noted that the distribution of free water allocations is not consistent with National Competition Policy, the Coalition of Australian Governments’ agreement on water usage or the user pays philosophy.
The total water capital budget for 2008/09 is $11.82 million.
CONCLUSION
In conclusion, we are managing a large regional authority in difficult economic times with a back drop of uncertainty in the domestic and international markets, forcing up the cost of doing business.
The amalgamation of the two Local Government Authorities has been a complex, difficult and costly task which has had considerably more impact on the former Douglas Shire residents than it has on former Cairns City council residents.
Finally, there has been wide speculation over many weeks in relation to the remuneration packages for Mayor and councillors.
I take this opportunity to set the record straight. Under the previous arrangements, the combined salaries of mayors and councillors across Cairns and Douglas was $1.5 million, and today that has been slashed to $1.2 million.
However, the area the new council services has extended from 1600 square kilometres to more than 4500 sqkm, with the workload now shared among just 11 elected representatives - not 20.
The budget developed is a financially responsible one that fosters economic and environmental sustainability of our communities and maintains our community infrastructure at an appropriate standard of serviceability and amenity.
RESOLUTIONS
In conclusion Councillors, I will now move into the agenda items with which we need to initially deal before I will commend the 2008/09 Cairns Regional Council Budget to you for its adoption.
