Rates increase a challenge for 2015/16 budget

Balloon inflation

Some inflation is not measured by CPI

Capping rate rises to inflation was a key 2012 election commitment from Mayor Karen Williams.

This promise is likely to be front of mind as she prepares her next Redland City Council budget, for delivery on 25 June. But how easy is it to cap rates to inflation?

2014/15 rates increase is greater than inflation

In its 2014/15 budget the Council claimed that:

  • Average rate notice increase is 3.95% (including utilities and separate charges)
  • Average residential general rate increase is 3.50%

Although not widely promoted by Council, commercial properties were hit particularly hard, with average increases of 15%.

The generally accepted measure of inflation is the Consumer Price Index (CPI) published each quarter by the Australian Bureau of Statistics (ABS). For the December 2014 quarter, annual inflation in Brisbane was 2.0%. So Council rates in 2014/15 have increased significantly above the annual inflation rate as at the year’s midpoint.

Will the Mayor be able to do a better job with the 2015/16 budget, and limit increases to Council’s rates and charges so that they do not exceed the forecast CPI inflation rate?

This could require a cost squeeze which would have implications for the delivery of services and projects throughout the City. Sometimes spending cuts have immediate and obvious impacts. Other “savings” can take many years to cause pain (like reducing maintenance spend).

Checking the budget assumptions

Most business people know that any budget or forecast is only as good as its assumptions. So can we find out more about the detailed assumptions that Council uses when it makes up a budget? Well only what they choose to tell us about.

The Right to Information Act exempts the Council from having to divulge “Information brought into existence in the course of a local government’s budgetary processes”  for 10 years after the date it was brought into existence”.

Of course Mayor Williams, who promised increased transparency when campaigning for office, could choose to publish her detailed budget assumptions when she delivers her 2015/16 budget.

Winners and losers from land revaluation

All SMBI property owners pay the Translink levy

All SMBI property owners pay the Translink levy

Changes in land valuation could cause significant variation in rates for 2015/16, depending on your suburb or island. Land valuations in Redland City were revised recently by the State Government. Average valuations increased by 2.2% but there were some significant variations, including Cleveland where values went up by 14%.

In December 2012 the Council decided that Southern Moreton Bay island (SMBI)  property owners would pay an $88 Translink levy, even though a majority of properties are vacant land and their owners do not regularly use ferry services.

Mayor Williams justified her approach by saying in July 2013 that:

The TransLink levy is applied to properties because I believe property values will improve over time as a result of better accessibility

In fact, the latest government valuations show that land values on the southern Bay islands have decreased by 13 – 15% since 2013.

SMBI property owners, already unhappy with lack of basic infrastructure like sealed roads and sewage treatment, will be very interested to find out how this fall in land values is reflected in their rates for 2015/16.

Further details about the recent land valuations are available in this Redland City Bulletin report.

Environment charge

Council has stopped buying conservation land

Council has stopped buying conservation land

For many years Redland City has added an environment charge to rates bills. This was originally intended to cover the cost of buying and owning land for environmental and conservation purposes.  In 2012/13 the charge was reduced from $99.80 to $65.00 ” with a corresponding reduction to the environmental program”.

Last year the environment charge was increased by $20.00 to $85.00 “to fund the majority of operational environmental works previously funded from general revenue and retained earnings”. No reason was given for this change which had the effect of allowing the Council to keep general rates lower than they would have been if these works had to be funded normally.

In recent months the community has expressed much angst about threats to koalas and their habitat in the Redlands. Will the Council respond to these concerns in 2015/16 by reverting to proper use of the environment charge to fund increases to the City’s conservation areas?

Pensioners

The rates concession for pensioners is a fixed amount of $330.00. This amount has not been adjusted in line with inflation in any of the last three three budgets delivered by Mayor Williams.

Will the 2015/16 budget be better for the City’s pensioners? The rates concession will have to increase by about $30.00 (9.0%) to compensate for inflation since the amount was last adjusted in the 2011/12 budget.

Canal properties

Canal property owners have already expressed frustration over their extremely high rates and levies as reported in Redland ratepayers fed up with Council charges. They will be watching the next budget very closely to see if their concerns get addressed.

Are Redlands rates the highest?

Redland City rates the highest according to the Sunday Mail

Redland City rates the highest according to the Sunday Mail (click to enlarge)

As well as focusing on the size of a rates increase, the Council needs to keep the City’s rates and charges competitive with those elsewhere in the region. A comparison last year by the Sunday Mail found that “Redland City residents are slugged with the highest average rates in southeast Queensland”.

What do you expect from the 2015/16 Redland City Council budget?

Now is the time to have your say, while the budget is still being prepared.

Here are Redland City Council  contact details.

Redlands2030 – 17 April 2015

Update 23 April 2015 – Latest CPI data

CPI data for the March quarter 2015 shows that Brisbane’s annual inflation is now down to 1.4% . The quarterly increase for Brisbane was 0.0%.

Australia’s annual inflation rate fell to 1.3% following a 0.2% increase for the quarter.

Annual inflation for the past four years is shown on the chart below.

Inflation up to March quarter 2015

Please note: Offensive or off-topic comments will be deleted. If offended by any published comment please email thereporter@redlands2030.net

5 thoughts on “Rates increase a challenge for 2015/16 budget

  1. Well how unusual that Karen wouldn’t deliver on what she promised she would! Why do we have to pay so much for rates when Brisbane is paying around the $300 – $400 per quarter and we’re paying nearly $900 per quarter? I don’t see anything improving, I can’t see that I’m getting 3 times the value that Brisbane City people are getting.

    Karen has her own agenda and she should just own up to the fact that any money she can get into the Redlands is going to be spent on subsidising development, development, development! View of the future looks bleak – not only for the koalas but for the true Redlands community members – the people who care about what happens to our beautiful laid back lifestyle, flora and fauna. Concrete at every turn, an extra 10,000 people inhabiting the Redlands, congestion on the roads, overcrowded and ill-equipped shops, extreme shortfall in parking, loss of wildlife and their habitats, a decrease in our living standards and an increase in crime! Well done Karen I think you have managed to completely ruin the Redlands that most of us love to bits.

    Why is it that when reports are presented you never have anyone owning up to the fact that they tried to accomplish something, but didn’t quite get there, but they have a plan to continue to fight for what they promised the people of the electorate they would deliver? Why is it they don’t ever deliver hard facts about what they really intend to do? Look, I know that development has to take place in order for a community to continue to grow, but there has to be a limit and the development has to be in line with the Redlands and what the community members want…. and it’s ok to want to live in a quieter area that favours wildlife and nature reserves!

    With the extra 10,000 people are our rates going to decrease? If the rates continue to increase at the rate they are, there will be many people who won’t be able to afford them. They’ll have to move out of the Redlands and sell their property. Will these properties then be redeveloped to house five more families? Is this the plan to get everyone out who owns a property so it can be redeveloped and therefore offer a higher quota of families the chance to live in this fast developing concrete jungle? Are we going to be like China where the masses live in high condominiums that somehow fit an entire house into an area of about 6m x 6m? You walk in through the door to see a small sitting area and a bookshelf. When it’s time for food, the sitting area disappears into the wall and a kitchen pops out from another wall area. When it’s time for bed the kitchen returns to the wall and a bed unfolds from where the bookshelf once was and a small mirror is exposed. Maybe this is your desire Karen, but it’s certainly not mine – I’d move to China if I wanted this revolting way of life! Do the right thing and get out of office, leaving room for someone to do their job properly!

  2. Cost of living keeps rising and visiting friends from overseas tell me it’s high in Oz. That fact was confirmed on ABC news report last evening where it stated “Australia is the world’s most expensive country”. It tops the chart. Seems Redlands tops the chart where residents pay the highest average rates in SEQ while Moreton Bay pay the least and whose Mayor Sutherland shed 800 jobs to keep rates down.
    Services in Redlands have been cut to where it is by request that gutter debris after rain storms that land on grates in front of some homes are removed by council as I could not park in front of a home with grate by driveway packed solid with debris. Resident could no longer remove it having suffered a stroke and left with disabilities. Following up, noted council took care of it. At one time street sweepers came after every storm.

    Pensioners are dismayed concession rates remain unadjusted in line w inflation in any of the last three budgets. Will 2015/16 be any better? Low income families and pensioners on Struggle Street are finding it harder to get by where living costs continue rising. Personally am angry our Environmental Levy, set up to buy highly valued environmental land such as known koala habitat was squandered on OPERATONAL WORKS…while habitat after wildlife habitat is flattened to fill developers pockets and fill council coffers depriving locals of quality of life and wellbeing. Sadly, we have a dysfunctional council that shows no respect for environment or its people.My view, having paid into the environmetal levy for the past 27 years and only see continuing degradation of our environment inCapalaba.

    • I couldn’t agree more with you comments Sarah, the other very important fact with regards to the rates charged is on SMBI properties. This William led council use the 12A and 12B categories charged to the Islands as a milking cow of revenue as these SMBI owners pay a factor of more than double the calculated factor to land valuation to any other part of the Redlands. This means the average unsewered vacant property owned by a none resident will pay twice as much more per year than a similar fully serviced block on the mainland or Stradbroke and Coochie. I can’t wait for the next council elections to boot this Mayor and her four pro development followers out of office. We are all paying through the nose to have the very things we hold dear in the Redlands being bull dosed like the dwindling natural environment and farmland for yet more houses and cars.

      • I agree with Toni Bowler who stated in her letter in this week’s local newspaper that the half dead Norfolk pines cnr Redland Bay/Moreton Bay Rds Capalaba at a cost of $240,000 is not seen as value for money. Driving by yesterday friend said ‘they should be chopped down’..another said they looked ‘pathetic’. Cr Gleeson told me you had to see through them to Freedom Furniture. No problem there! But there is more to come. Seating & more plantings around to Mt Cotton Rd. Why spend more money needlessly. Shade is needed for seating and who would want to be breathing in deadly fumes from car/truck exhausts in a high trafficked area like Redland Bay Rd. We have an increasing crime rate so it wouldn’t be safe walking alone these days along a footpath or sitting on a seat with only a concreted landscape to view.
        Money would be better spent on upgrading our local parks. Over 20 years ago I personally resurrected park adjoining Ingham St (where Mr Fiteni built houses into ghetto end of it & TAFE fence used for side of a pool) with help from council parks workers & KAG but since protected koala trees were destroyed for houses, trees planted in the park had no koalas left to use them. Nothing has been added to the little that’s there in play equipment. Only a tall street light…to deter drug addicts.

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