‘Not unusual’: Mayor defends eye-watering salaries after council votes to raise rates 40 per cent

Eye-watering salaries at a council where the CEO earns nearly as much as the PM have been slammed after a vote to raise rates by 40pc.

The eye-watering salaries of staff at Northern Beaches Council (NBC) — where the CEO earns nearly as much as Australia’s Prime Minister — have come under fire after a controversial vote to raise rates by 40 per cent was branded “disgusting” and “disgraceful” by struggling locals.

Northern Beaches Mayor Sue Heins defended the $544,000 salary of chief executive Scott Phillips on Wednesday night, telling Channel 10’s The Project it was “not unusual”.

“So we don’t have a liquidity problem,” Cr Heins said. “We also, like all councils at that very senior position, that is a position that is not coming under any award. We all look and headhunt for people that we’re looking for. So our CEO’s rate is not unusual.”

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NBC hired Mr Phillips in 2023 on a five-year contract. He was previously the CEO of Local Government NSW, the peak body representing councils.

Mr Phillips said in a statement at the time that he was “passionate about working in local government” and believed in “delivering the best value service to the community and exceptional customer experience, backed by an effective and highly sustainable organisation”.

Independent Councillor Vincent De Luca, who vocally opposed the rate increase, has pointed out that council spends $25 million on 111 managers, directors and executives.

In its 2023-24 annual report, NBC had four senior staff earning a combined $2,846,877, not including Mr Phillips’ $544,875 pay packet.

Two hundred people protested outside the Dee Why council chambers. Picture: Supplied

According to analysis by The Daily Telegraph, NBC pays its top executives more than nearly any other council in metropolitan Sydney.

“Our employee costs are consistent with industry benchmarks, and we have some extremely high-performing employees whose skills are regularly recognised through industry awards,” a council spokesperson told the newspaper.

NBC employs 1800 staff at a total cost of $159 million, accounting for 40 per cent of its annual budget.

“What on earth are they all doing?” Freelancer CEO Matt Barrie asked on X. “Plus they’ve outsourced the garbage collection for a decade, so what are they all doing? Why couldn’t you run the council with 100 staff?”

It comes after hundreds of furious residents protested on Tuesday night ahead of the move to raise their rates by 40 per cent, with councillors ignoring their pleas — and the council’s own consultation process — to vote 8-7 in favour of the hike.

NBC voted to apply to NSW’s independent regulator to increase rates by 39.6 per cent over three years.

The proposed rate increase, which will raise an additional $57 million per year for the cash-strapped council, will now be determined by the Independent Pricing and Regulatory Tribunal (IPART) in its annual 2025-26 special variations process.

NBC covers roughly 50 suburbs stretching from Palm Beach to Manly and represents about 267,000 residents.

“Disgusting,” Narrabeen resident Jenny told Manly Daily, saying her rates would increase from $400 per quarter by hundreds of dollars under the proposal.

“They are treating us like idiots. The mayor sounded like a schoolteacher chastising us. A lot of us are struggling. This is going to send people and a lot of small businesses to the wall.”

NBC represents about 267,000 residents. Picture: John Appleyard

Cumberland City Councillor and former Mayor Steve Christou blasted NBC for its “laziness and incompetence”.

“I’ve been saying this for years — the wastage in local councils is tremendous,” Cr Christou said in a statement.

“Overstaffed with fat cat CEOs and upper management who love to waste ratepayer money on woke culture wars rather than representing the ratepayers’ interests. Rather than slug ratepayers with a 40 per cent hike in council rates they should order the general manager to undergo a restructure of the organisation and identify where money can be saved.”

About 200 furious residents gathered outside the Dee Why council chambers ahead of the vote, which sparked cries of “sack them all” from the gallery.

The meeting had to be stopped twice due to members of the public shouting at councillors, and multiple people watching the proceedings walked out in frustration.

Councillors were at each other’s throats during the four-hour meeting.

Cr Miranda Korzy, who was in favour of the rate rise, sparked jeers and boos from the public after she said calls for “cuts and efficiencies” were part of “the neoliberal drumbeat we are hearing in the community”.

Cr De Luca, who had called for cuts instead, repeatedly interrupted Cr Korzy’s comments trying to raise a point of order.

“Sorry, what’s your point of order?” an irritated Cr Korzy snapped.

“I’m happy to tell you the point of order if you’d please just be quiet and let me say it,” he replied.

“Why don’t you just shut up?” Cr Korzy hit back.

“The point of order is our code specifically says that no one should be discriminated against,” Cr De Luca said. “If a Liberal Party member, a Libertarian, a Green wants to get up, who bloody cares? Are you saying you won’t listen to them because they’re a Liberal?”

Cr Vincent De Luca vocally opposed the rate increase. Picture: Supplied

Council said in the proposal that the rate rise was needed to “maintain financial sustainability and to continue to deliver services and assets as expected by our community”.

Rates, which are levied on the basis of land values, are the council’s main source of income, currently making up 44 per cent of revenue.

“Like many councils in NSW, [Northern Beaches Council] is facing growing pressure to its financial sustainability as increases in income, under the NSW rate peg system, have not reflected the rising costs of materials, contracts, and construction, with Sydney’s inflation over the four years to June 30, 2024 being almost double the increase in rates income,” it said.

“A special variation (SV) to rates will be required if council intends to continue to meet community expectations and deliver existing services and service levels as well as ensure availability of funding for new and upgraded assets, environmental outcomes, loans and unforeseen events such as storms, and remain financially sustainable in the long-term.”

A community engagement process polled residents on several options, including staying at the rate peg — the maximum amount set by IPART that councils can raise rates without approval for a special variation.

Fifty-one per cent of the roughly 6000 respondents backed no change, or to “reduce” service, while 32 per cent supported option two, which would have maintained services while still increasing rates by a sizeable 31.1 per cent over three years.

But council nevertheless voted in favour of option three, “improve services” — an option favoured by just 11 per cent of respondents — to permanently increase rates by 39.6 per cent.

“While many of the survey respondents indicated they did not want an SV, there was also support for levels of service to be improved, which is not possible without a rate increase,” council said.

The current members of Northern Beaches Council. Picture: Supplied

“While option two provides funding to maintain services, it does not deliver the capacity to undertake improvements and major renewal works. Improvements that were mentioned by the community included those regarding environmental protection, sporting amenities, footpaths and roads.”

NBC blamed the Covid pandemic, as well as storms, flooding and bushfire threats in recent years, for its perilous financial position.

Covid resulted in a net cost to council of $41 million, while seven natural disasters over the past six years cost $15 million, of which $7 million had been recovered from federal government disaster funding arrangements.

Various cost cutting measures totalling $2.4 million over the past three years “are unable to fully offset the impact of recent high inflation levels”, council said.

In response to questions about staffing levels and remuneration, NBC said in the document that “the number of staff within the organisation, by itself, is not a useful measure of its efficiency”.

Cr De Luca had called for council to seek cost savings by axing “non-core” services such as Open Air Cinemas, World Food Markets and Food Trucks.

“Sadly, this waste of ratepayers’ money continues,” he told Manly Daily.

In response to those calls, council said a “reduction in some non-essential service and administration would not be of a scale to offset the required level of funding for council’s asset maintenance and renewal backlogs that are in the order of approximately $40 million per annum and increasing”.

The application to IPART must be made by February 3. Ratepayers will then be able to make submissions through a public consultation process.

NBC has been contacted for comment.

Originally published as ‘Not unusual’: Mayor defends eye-watering salaries after council votes to raise rates 40 per cent