Is externally imposed Rate Capping Good Policy or Bad Policy?

Yes or No! Is externally imposed Rate Capping Good Policy or Bad Policy?  That is what I and my elected member colleagues will be considering at Monday night’s upcoming special council meeting.

We will be responding to the LGA’s request to determine if we accept or not the Government’s Rate Capping Bill, the Rates Oversight Amendment Bill.

Is an externally imposed Rate Capping Good Policy or Bad Policy? Readers of this blog site would be well aware of my views on rate capping from previous blog posts. There are many, most recently the one you can find here.

As I noted in my last blog post, on Monday night I will be called upon to vote on whether or not the City of Unley opposes the Government’s Rate Oversight Bill or not. A Bill designed to provide 3rd party oversight into the setting of local government rates.

 

ESCOSA

ESCOSA logo

 

The Bill nominates ESCOSA as that 3rd party. This is the body that has provided oversight into the massive hikes in costs to the community of water and power since around 2000. SA Power prices we all know are the highest in the world. Not sure therefore of the wisdom of this.

So. Is External Rate Capping Good Policy or Bad Policy?

As I have often said Unley understands the value of rate capping. Self imposed rate capping that is. Striking a rate first and then cutting your cloth to suit is a sound financial strategy.

We have been doing this for some 6 years. When we undertake a new project we consult extensively with our community. More than most and definitely more than the legislation covering us requires. At budget time when we are prioritising these projects, we consult again.

I am far from convinced that the State (through ESCOSA) setting a rate cap is in your best interest. On the contrary, if the State were to mandate all Councils follow our lead I would be in support.

They will determine what the rate rise will be for an industry they have no knowledge of. An industry that already has, I believe, strong oversight. Oversight provided by you, by way of public consultation and by way of the ballot box every 4 years. Oversight not available in the power or water industries.

At what cost?

This then is my primary concern. At the very least their Bill will add a cost burden on you through your rates because we will have to pay ESCOSA for their overseeing of us, just as the Power industry and the water industry does. The Government will not be funding them. And, we do not yet know what this cost will be.

To add further salt on the wound, if you & your council believe there is a project worthy of us applying  for a variation we will be asked to either consider not doing something else we currently do for our community or convince them that you understand the implications of doing it. At a cost by the way for them to assess the variation, catch this, of $ 40,000.00. You heard that right. Add $ 40,000.00 on top of whatever the project cost is for them to assess its merit.

How do you feel about this prospect?

Please watch out for further questions and concerns I have on your behalf.

 

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