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City council deadlocked on rates hike

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A proposal by Lord Mayor Martin Haese to increase rates on city residents and businesses divided the Adelaide City Council at a meeting last night.

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Five councillors voted to support Haese’s motion to increase council rates in line with inflation for the 2016-17 budget, but five voted against it, resulting in a deadlock.

A contrary proposal by north ward councillor Phil Martin – to freeze rates at their current level – was also tied at the special meeting of the council’s Finance and Business Services committee last night.

Haese told InDaily this morning that an increase to rates charged to city residents and businesses during a period of “historically low inflation” was appropriate.

“I’d entertain a position of a CPI [inflation rate] increase … based only on the fact that CPI is at historical lows,” he said.

The price of goods and services in Adelaide grew by one per cent from December 2014 to December 2015 (or 1.1 per cent year-on-average) according to Australian Bureau of Statistics.

Haese said an increase in council rates that reflected the inflation rate would therefore be “very modest”.

He said that the amount of revenue left unspent by the council when projects remain incomplete by the end of the financial year for which they are budgeted – known as “carry-forwards” – was “the bigger issue”.

Haese has recently flagged reforms to reduce carry-forwards, arguing that council funding decisions about maintenance to basic infrastructure in the city should be decided for the next three financial years at once rather for than a single financial year.

He argues this would give surety to residents and business that planned works would actually occur, and allow the council’s administration to buy more goods and services in bulk.

“If we deliver everything we said we would deliver [in the year it is meant to be delivered] our ratepayers will be suitably impressed with improvements to city infrastructure [to countenance the rate hike],” Haese told InDaily this morning.

However, councillor Phil Martin said it would be wrong to ask rate-payers for more money, given the council’s administration was not able to spend millions of dollars allocated in last year’s budget.

“How can we go to the ratepayers and say ‘we’ve got more money than we know what to do with, but we’d like some more … even though we don’t need it’,” he asked.

“It’s not council’s money … it’s [ratepayers’] money we’re talking about.

“Adelaide City Council is one of the wealthiest councils in Australia, and we are on target for a substantial positive bank balance.

“If we are ending up with profits, we’re not in need of increases in money.

“There’s no need to take it.”

Deputy Lord Mayor Houssam Abiad told InDaily he voted against both Haese’s motion to recommend a CPI-tied rates hike and Martin’s motion to recommend a rates freeze.

He said that if the council’s administration were not able to find “efficiencies”, then a rates increase in line with inflation may be necessary.

He said the council was expected to get about $1 million in extra revenue during 2016-17 because of new developments in the city.

Haese suggested that while he believed rates should increase, fees and charges could be lowered at the same time.

“There are a number of revenue streams,” he added.

Councillors Alex Antic and Sandy Verschoor were absent from last night’s meeting.

The rates issue will be reconsidered by the council in a fortnight.

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