Affordable rates?
Victor Harbor Council rates are among the highest in South Australia. While there are several defensible reasons for this, I believe more can be done to reduce the burden on ratepayers in a community where Council’s long-term financial planning material identifies around 39% of the population as welfare-dependent.
I believe Council should aim to keep rate increases at or below inflation, as measured by the CPI. Any increase above inflation should face a very high burden of proof.
ESCOSA1 has assessed Victor Harbor’s projected financial performance as “mostly sustainable”. However, it has also specifically called on Council to identify and report actual efficiency savings and to set clear efficiency targets. In my view, the Council should demonstrate that it has done everything reasonably possible to improve productivity and efficiency before asking ratepayers to fund increases above inflation.
Before supporting an above-inflation rate increase, I would expect Council to have pursued a number of measures. These include detailed annual productivity reviews of Council operations, with transparent reporting of the results; expanded shared services with neighbouring councils and an objective examination of whether deeper regional integration could deliver further savings; stronger pursuit of State and Federal Government grants; more rigorous reviews of major projects; and prudent use of debt for long-lived infrastructure and asset renewal.
Importantly, Council should keep rates down by improving productivity and capital discipline, while directing more of its available financial capacity toward renewing the infrastructure the community already owns.
As a former senior banker, I support the prudent use of debt to finance worthwhile assets. Debt should not be used to make a poor project look affordable, nor should it be avoided simply because borrowing makes people uncomfortable. Properly managed, debt can allow the cost of long-lived infrastructure to be shared more fairly across the generations of ratepayers who will benefit from it.
In summary, Council should aim to keep rates at or below inflation. Any increase above CPI should face a high burden of proof, including demonstrated productivity improvements, rigorous capital prioritisation, pursuit of external funding and consideration of prudent debt for long-lived infrastructure.
Should I be elected to the City of Victor Harbor Council in April 2027, this is the kind of financial discipline I would support in Council decision-making.
Peter Hanlon
Candidate for Victor Harbor Council
1The Essential Services Commission (Commission), South Australia’s independent economic regulator and advisory body, has been given a role by the Parliament to provide advice on material changes proposed by local Councils in relation to elements of their strategic management plans (SMPs) and on the proposed revenue sources, including rates, which underpin those plans.