2012 > 2013 Budget Submission: Tasmanian Ratepayers

 28 May 2012

The General Manager,

Mr. R. Dobrzynski,

Launceston City Council

P.O. Box 396

LAUNCESTON TAS 7250

Dear Mr. Dobrzynski,

Re : Budget Submission for 2012 - 2013, Launceston City Council

The Tasmanian Ratepayers Association (TRA) appreciates this opportunity for Launceston residents to contribute to the debate on the development of the 2012-13 Annual Budget and striking of the rate. This submission is informed by the proposed Statutory Estimates and the Annual Plan published with the Launceston City Council (LCC) agenda of May 14.

The TRA expresses its disappointment at the proposed budget. The budget is a business as usual budget without any acknowledgement to the state of the Tasmanian economy and the plight of ratepayers. It seems that LCC senior management and aldermen are blissfully unaware of the dramatic collapse the Tasmanian economy occurring in the last 24

months. 

The only concession to the reality being faced by the majority of Launceston ratepayers is the statement that:

‘The Council does not believe that this level of operating deficit is sustainable and so will be implementing a plan to reduce operating costs in the short to medium term’

Given LCC’s admission to the fact that it must rein in expenditure and become sustainable, and this is what the TRA has been formally putting to LCC for quite some time, we find it remarkable that LCC is not proposing any effective action to achieve this noble goal, as an integral measure in the proposed budget.

The cost of living crisis in Tasmania, pointed out by the TRA to LCC and to the State Government now for several years, continues to not attract effective action. Given that the State Government and public utility authorities have been called upon to contain costs and reduce charges, curiously local government seems 'out of touch' with reality here, and LCC is making any adjustments in this regard. It seems that LCC’s assumptions about the capacity of ratepayers to pay are not questioned. The estimates states it has Tasmanian Ratepayers Association Incorporated

– Submission to Launceston City Council Budget Consultation 2 only revised two underlying assumptions – That Ben Lomond Water will not reduce its distributions; and that there will be a reduction in interest earnings.

The TRA made a detailed submission last year when LCC introduced this consultation with ratepayers, calling on LCC to consult with the community throughout the year on this topic, however, the consultation is again effectively too little, too late.

We will be interested to observe how well attended the ‘consultation session’ to be held on 28th May is as last year's sessions were poorly promoted and poorly attended. Few ratepayers are able to write submissions or willing to attend briefing session on a cold winter's evening at the Town Hall. Given the short shrift given to comments and suggestions at other public events such as the AGM, TRA will not attend this evening’s meeting.

More information ought to have been disseminated beforehand, so ratepayers could better understand why they should attend a session. Whilst council has again provided a means for submissions to be made via the internet, it fails to acknowledge that there are many in the community that are very concerned with the direction being taken by LCC, but are loath to express their concerns in public given the attitude shown by LCC staff towards members of the community that express critical views on LCC.

This submission summarises the concerns of a number of members and nonmembers of the TRA . TRA said last year that for something as important as rates, the consultation should have started 12 months ago, after the last rate decision. We said, and again we repeat that this consultation must be genuine, be real and persuasive.

Once again, promises by aldermen to present modelling based on a land valuation method, have failed to materialise in the public arena, and even though we have been told this exercise has been done, LCC continues to keep

it from the community it is meant to serve.

Clearly the present use of AAV to assess municipal rates is inequitable and broadly unpopular, and must be abandoned. That is what the findings of the ACCESS Economics report commissioned by the State Government's Steering

Committee essentially found and recommended to Parliament.

TRA wrote to LCC on 2 April 2012 regarding the State Government's legislative review of rating systems. It took the Mayor until 15 May 2012 to reply, and then again avoided the situation by claiming LCC has legal advice regarding some perceived constraints within the existing (amended) legislation.

LCC claims that flat or fixed charges are regressive and refuse to heed the requests demonstrated by community support for this method of rating, and Tasmanian Ratepayers Association Incorporated – Submission to Launceston City Council Budget Consultation 3 very popularly accepted in some other municipalities in Tasmania. 

LCC continues to say it is waiting for the State Government's review of valuation and rates systems, but in reality TRA believe that the influence of particular Council Executive staff are simply refusing to allow any consideration of a

rating system other than the very unpopular, unjust and inequitable system based on Assessed Annual Values.

Some Aldermen pledged the removal of AAV from Council's rating system when facing election and re-election last year, but as commonly found in local politics, these pledges and public promises are easily broken and effectively

the 'business as usual' principle is maintained.

In this particular year when governments are restraining expenditure, we again plead for Launceston to actually reduce its budget by 4% and pass this relief onto ratepayers.

Launceston's lame excuse that it is unable, or perhaps as we say, unwilling, to introduce a more equitable user-pays system (which the Mayor has claimed is regressive) is clearly not in the interests of Launceston Ratepayers. LCC has finally admitted that activities of Local Government must be restricted to more appropriate local government activities and not become to the benefit of a greater region, unless citizens from the region but outside the rateable area also contribute.

TRA has stated that if this cannot be by agreement with the neighbouring rating authority, then it must be on a user-pays system. Local Government must not continue along a course of becoming 'mini-government' and needs in these difficult economic times, to focus on core Local Government responsibilities and activities.

TRA also believes that apart from providing relief to ratepayers, Launceston rates should in any event be decreased by 4% a year for say, the next 5 years in order for the rates to fall closer to that of surrounding municipalities so that at merger, the surrounding municipalities are spared such a shock.

Council concessions and usage charges.

The cost of the Waste Centre should also include its substantial need for capital. The waste charge should be increased to accurately reflect the cost of maintaining the Waste Centre and its substantial requirements into the future. Waste charges should be raised to ensure enough surplus is generated to go into a sinking fund from which improvements to the centre should be funded. 

There should be no contribution from the general rate. There is no valid reason for not charging for the true cost of receiving waste. Failure to do this encourages the production of waste and benefits those who generate large amounts of waste and those outside the municipality that do not contribute to the general rate. This is unsustainable and contrary to

modern practice where the generator of the waste pays for its disposal. Tasmanian Ratepayers Association Incorporated

– Submission to Launceston City Council Budget Consultation 4

Likewise the operation of Carr Villa should not require a subsidy from ratepayers. Ratepayers should only need to pay for their own funeral, not that of others.

Where there is a subsidy from ratepayers for users of facilities that provide what is essentially a private good; for example Launceston Aquatic, St Leonards Athletics Centre, Carr Villa, Princess Theatre, Tiger Bus, this subsidy should be equally divided among all ratepayers, thus minimising each individual’s contribution. Further, the subsidy should be explicitly identified in the rates notice. 

The allocation of this subsidy on an equal basis across all ratepayers is consistent with the charge levied for all these services, which is not done on the basis on AAV. For example, the Aquatic centre entry charge is not on the basis of the AAV of the swimmer’s home.

Such an approach towards hidden subsidies to private goods would be consistent with LCC’s organisational value of integrity and telling the truth. This would also enable Council to better inform the community of the cost of services and would likely encourage more efficient use of these services.

The low numbers of people using the Aquatic Centre bears witness to the factthat a majority of ratepayers never use it and if they had a rate notice that clearly identified their contribution towards it, this would possibly encourage them to use it.

Council Concessions – Retirement villages

The association holds that retirement villages should not receive a rates remission. This is consistent with LCC management advice several years ago. The budget neglects to mention the largest concession of all, that of the rates foregone on the University of Tasmania. The University of Tasmania is a business like any other business and it should pay rates like any other business.

If it is not to pay rates, the concession should be acknowledged in the accounts. The fire levy that is collected by LCC on behalf of the Tasmanian Government should be discounted by the amount that should be collected from the University and the difference made up by the Tasmanian Government.

Tourism

Tourism expenditure is one area where Council can find immediate savings. The Travel and Visitor Information Centre (LTIC) should be closed forthwith. If the tourism industry sees the value in this service it should be funded from a

special rate on tourism accommodation and other tourism-related properties that get direct benefit from the expenditure, not from the general rate levied on residential ratepayers. Tasmanian Ratepayers Association Incorporated

– Submission to Launceston City Council Budget Consultation 5

In future a case could be made for residential ratepayers to make a contribution to very specific tourism-related projects where the industry funded a minimum of 60%.

There has to come a time when tourism becomes like any other industry, where it has reached maturity and is able to look after itself. LCC management and aldermen need to understand that there is a limit to the ratepayers funds that can reasonably be spent on Tourism. Tourism is an over serviced sector of the economy that needs to stand on its own.

The only expenditure on tourism supported by the TRA is the proposed $108,000 for the Regional Tourism Organisation. This initiative deserves to be given an opportunity to deliver what other tourism initiatives have clearly failed to deliver. To gauge the commitment of the industry to this initiative, the industry should contribute half the funds via a special rate on accommodation and other tourism related properties.

LCC could even gauge once and for all the tourism industry’s commitment by making such a rate voluntary. If the industry truly values the work carried out by LCC on its behalf, LCC should have no trouble in securing 100% commitment from the industry participants.

The association notes there seems to be a discrepancy between the Annual Plan and the Statutory Estimates in respect of the LTIC, on the one hand

Strategy 3.1.2 states: Develop and implement a new model for the LTIC based on contemporary practice focussing on online bookings and promotion.

And on the other hand the Budget makes allowance for a loss on nearly $450,000 for LTIC operations. mA revised model for an LTIC based on online bookings and promotion would bring the industry’s promotion activities into the 21st century and enable the closure of the LTIC. It's much lower operating costs could be borne by the industry without any recourse to residential ratepayer funds or Launceston City Council itself. This would be a good outcome for the industry and the ommunity.

Commentary on Annual Plan Strategy 4.1.1 – Albert Hall

Continue to support the operation of a café over the summer months.

More information is sought on this initiative that does not seem to be mentioned in the budgets. Ratepayer funds should not be used to support a commercial operation. If the current leaseholder of the Albert Hall is unable to run a café at Albert Hall without ratepayer financial support, another operator should be sought to run the café. The café has been run in the past as a viable commercial operation. It is inappropriate for Council to run or Tasmanian Ratepayers Association Incorporated – Submission to Launceston City Council Budget Consultation 6

support commercial loss-making operations in competition with legitimate rate-paying businesses. Equally, the facilities at what used to be Victoria’s café should not be allowed to go to waste because the Albert Hall leaseholder does not care to operate them. A large amount of ratepayer funds was invested in the kitchens at them Albert Hall not many years ago.

Strategy 3.1.1 – Inveresk

1) Produce a briefing document for engaging consultants to ‘Master Plan’ redevelopment of the Inveresk precinct as an education, accommodation, cultural, sports and tourist precinct, including Aurora Stadium to ensure it remains suitable for contemporary entertainment.

More information is sought on this initiative. The TRA suggests that the postponement of this initiative could be saving to the budget. A no-doubt expensive report has already been done on this. The Launceston Strategic Tourism Plan by Stafford and Associates was released in February and has not yet had enough supportive tourism industry or general community response.

The Stafford report contains a predictable list of recommendations for yet more consultancies, none of these recommendations have been publicly discussed and ratified by the tourism industry. It is easy for any one of the many tourism industry bodies to ‘support’ initiatives that involve the expenditure of other people’s money. The Master plan seeks to cover the same ground and should not be pursued until the tourism industry supports the report recommendations by funding some of its initiatives itself.

The Association notes recent council decision to allow the construction of student accommodation at Inveresk and questions the compatibility of student accommodation with a cultural and tourist precinct. The bulk of the muniversity remains at Newham and will always remain there. The value of splintering off a small number of students to Inveresk needs to be further quantified in benefits to the students and the rest of the community.

To date, the bringing of the Arts and Architecture schools to Inveresk has not had nearly the positive and transformative impact that was promised. The university buildings at Inveresk at weekends remain a largely desolate space. For example, the Arts School gallery is seldom, if ever, open on weekends and contributes nothing to the cultural aspect of the precinct on weekends. It is highly questionable that student accommodation at Inveresk would greatly

enhance the experience for tourists or ratepayers.

The proposed construction of student accommodation along the North Esk River frontage at Inveresk, also will close off the long-held and published view of TRA that this land is critical to an east-west road link extending from Lindsay Street to Henry Street. This link is vital to serve the needs of the community and to take pressure off our congested central area and Elphin Road. Tasmanian Ratepayers Association Incorporated – Submission to Launceston City Council Budget Consultation 7

Conclusion of the long-promised study into Launceston's roads and the Eastern Bypass Road is a continually being deferred by LCC staff. TRA views the premature commitment to the Inveresk site for housing as nothing more than a cynical avoidance of the needs of road users. If it is considered desirable and viable for student housing to be constructed in close proximity to Inveresk facilities and the CBD, then the more desirable location is on the southern side of the North Esk River and adjacent to City Park and other amenities. 

The former Goods Rail Yard, now the temporary Willis Street Carpark site, was acquired by LCC for the specific use of this land for housing, and any other development or use will breach the terms upon which LCC assumed ownership.

Strategy 3.1.5– Aquatic Centre 1) Install and Commission co-generation plant.

The rationale for this initiative is understood, it is being done to lower energy costs of the centre that have turned out to be much higher than originally budgeted and forecast by Council and the centre’s consultants and designers. Before any further ratepayer funds are spent on this facility, a proper energy audit of the facility should be carried out with a cost benefit analysis of the cogeneration expenditure versus other means to lowering energy costs. The audit should be publicly released.

Rates Analysis

TRA again asks for comprehensive data on residential valuations to be released to the public. LCC should develop an economic, social and spatial analysis of rates in Launceston as this is the best way to better understand equity in rating and develop a fairer basis for Local Government charges to be levied in this municipality.

Conclusion

In conclusion, TRA repeats its reminder to Council, both officers and aldermen, that many residents of Launceston are finding it tough to stretch their incomes to provide for the necessities of life. Impending cost increases for fuel and other energy utilities, along with constant increases in municipal rates, are causing significant hardship across the spectrum in the Launceston community, not just the traditionally recognised social welfare recipients.

When the family budget cannot stretch enough, research shows that people often go without food (especially expensive fresh fruit and vegetables, electricity for periods of time, adequate heating, new clothing, insurance,m social contact, entertainment, transport, holidays, medical and dental care,  and stop taking prescribed medications). Low income households spend  proportionally more of their income on the basics. Income, commonly does not necessarily relate to wealth held in residential assets. Nothing undermines social inclusion more than financial hardship.

Tasmanian Ratepayers Association Incorporated – Submission to Launceston City Council Budget Consultation 8

We hope that this submission is given very careful consideration, and that when aldermen eventually congregate to make a decision of striking the Launceston rate, that they fully acquit the promises made to ratepayers and detail completely their individual reasoning and justifications for what they will determine.

Yours faithfully,

Lionel J. Morrell

Lionel J. Morrell

President: Tasmanian Ratepayers Association Inc.

Copy to Mayor and Aldermen.