The party’s over – it’s time to cut shire rates
By Ben Bell
IT FEELS like a lifetime ago since Western Australia was enjoying the high-life thanks largely to the insatiable demand from China for this State’s iron ore and other mineral commodities.
During those days, house prices soared as people streamed across the Nullarbor from the eastern states to join the mining boom, incomes continued to rise and no one appeared to raise an eyebrow when being charged $15 or so for a beer at the pub.
It was during these hedonistic days that governments at all levels in Australia made big spending commitments and took on enormous levels of debt.
The local government of Toodyay was not exempt from this and, rather than using the good times to pay down debt and improve community services, it appears to have acted as if the mining boom was never going to end.Read more
How else can we explain the decision by the council to commit to building a $23 million recreation and sports centre when the Shire’s annual income via rates was around $5 million.
I guess the thinking was that people’s incomes would continue to rise indefinitely and, as a result, the Shire could continue to tap its ratepayers for more and more money each year.
As the good-old saying goes, those who don’t learn from history are destined to repeat the mistakes of the past.
Just as Australia has experienced numerous mining booms, each boom similarly ends with an abrupt and unforeseen bust.
Jobs are lost, the number of houses up for sale seems to double overnight as large numbers of people migrate back to their home towns on the east coast, and local, state and federal governments find themselves in tough financial positions because they have over-extended themselves for, in many instances, building ‘white elephant’ projects.
That is where we in the Shire of Toodyay find ourselves today.
Right now, the shire has debts of more than $2 million of which almost half relates to loans associated with the recreation and sporting precinct.
The number of light and passenger vehicles owned by the shire now stands at 23, which equates to just over one shire vehicle for every two shire employees.
I completely understand that when times are good, expenditure may become a little less disciplined.
But just as all of us need to adjust our household, farm and business budgets when times become a little leaner, so too should governments.
It’s not easy – I understand that.
No one likes to tell their kids that they can’t have something because they don’t have the money.
But if the money is just not there, then what else can a parent do?
The same is true for the Shire of Toodyay.
Just because the shire issued a 10-year plan back in 2013 stating it wants to increase rates by five per cent above inflation each and every year, should not mean that it should do so in complete indifference to changes in the broader economic environment.
When the people within your community are struggling to find work and those in employment haven’t had a pay rise for years, it is nothing short of heartless for any shire to impose increased rates on its community.
It is for that reason that other local governments such as the City of Stirling have frozen any rate increase this year.
Many others have applied very modest increases on their ratepayers this year but, saying that, none of these shires had the audacity to increase rates by 10 per cent in a single year as the Shire of Toodyay did a couple of years ago.
The time has come for the shire administration to look beyond their stated 10-year plan and appreciate that their pursuit of a protracted and unsustainable goal of ramping rates each year, far beyond what is sensible, may actually be hurting the very community it should be seeking to serve.
It is particularly sad to see that while the amount of money the shire is raking in every year from rates has been increasing, the amount of money the shire spends on community services as a percentage of rate revenue has been steadily declining.
It is now at a point where only less than 20 per cent of the money paid in rates by the Toodyay community finds its way back into funding community services.
Obviously, this trend is not sustainable and needs to be re-addressed quickly.
Toodyay is a vibrant place to live and, like most in this community, I wouldn’t live anywhere else in the world.
But if the shire continues to pursue a policy of increasing rates far beyond what is reasonable (as it has been doing to date), we may find that some in the community will have no choice but to sell up and move out of Toodyay (against their will) just because they can no longer afford to live here.
An independent review of the Shire of Toodyay earlier this year has already confirmed that our community pays more rates than almost every other similar shire in WA.
The same report also indicated that the level of services provided by the Shire of Toodyay is less than most other shires.
So, you and I are already paying higher rates and receiving less services and facilities than similar communities elsewhere in WA.
Like many in this community, I have been urging the shire to re-balance this rates versus services issue, and to do so without increasing the financial burden on the community.
And it is absolutely achievable.
During that mining and resource boom period of years ago now, a fair bit of ‘fat’ found its way into the accounts of the Shire of Toodyay, not the least of which was the substantial pay increases councillors gave themselves.
Even on a quick review, it is immediately apparent that rates could be cut by eight per cent this year without it having any impact on all on the services the shire provides the community.
All the shire needs to do is realise that the mining boom party is over and it is time to bring your rates back down in line with other shires in Western Australia.