Budget 2020-21 this week from Cairns and Douglas councils in challenging times. Both announced CPI increases in rates but adopted different numbers. Douglas went for 2.2% which was the national increase year to the March quarter while Cairns went for 1.8% which was the Brisbane CPI increase, or perhaps they were using the trimmed mean?

Brisbane CPI threw in a negative March quarter which dragged the annual number down while the Australia CPI figure made a modestly rare spike into the RBA target band. Pick a saleable number in the post truth world but it would be more useful if the LGAQ council cost index (CCI) was referenced:

LGAQ haven’t posted the actual index data that I can find but it appears that their CCI hasn’t diverged too far from CPI increases since the gap that opened up until 2012.

Both councils have flagged short term deficits:

“This will result in a short-term cash impact for Council, which will require the organisation to take on the burden of additional short-term debt,” Cr Manning said.
“However, by adhering to our fiscal principles and implementing the three-year plan to recovery, Council’s long-term debt position will not be impacted.”
Council has formulated a three-year plan to coronavirus recovery, which includes Budget deficits this financial year and the next, before returning to a balanced Budget in 2022/23.”

Mayor Kerr said Council must have a focus on growing its rate base and finding alternative revenue streams to ensure ratepayers do not wear the burden for the next few years.
“This is not a time for Council to be creating a surplus, it’s a time for it to be creating jobs, repairing infrastructure and ensuring that the economy of the shire progresses,” he said.
“As one of the hardest hit regions by COVID-19, we are facing uncharted territory and we are committed to getting the best results for this shire.

Douglas Shire is the one to watch here which was assessed as the most vulnerable by QTC in the de-amalgamation process and even more vulnerable now in current circumstances. If anything I was a bit surprised by the demise of Julia Leu in the recent council elections, the champion of de-amalgamation as councillor and subsequent Mayor. Although maybe not surprising given that the QTC assessment of the cost actually came true: Council de-amalgamation five years on

Note 1: The rates comparison table in the last link has gone astray in a WordPress theme update. Sorry.

Note 2: Cairns Council has flagged rate increases of 2.8% in the subsequent two years which will almost certainly be above CPI and Council Cost Index.

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