Cairns councillors ready for ‘a bit of pain’ as election year budget discussions loom
Cairns councillors are expecting a tough June budget as inflating infrastructure costs sting Spence St’s coffers, but opinions have presaged disagreement over how to balance the books.
Cairns
Don't miss out on the headlines from Cairns. Followed categories will be added to My News.
Cairns councillors have warned tough decisions will need to be made ahead of the 2023/24 budget, with inflating infrastructure construction costs cutting deep into council coffers.
Shiny projects have been all but ruled out and a rate rise not in keeping with recent years is all but guaranteed.
But how the books will be balanced, just how high rates will go, will be the subject of “hot debate”, according to deputy mayor Terry James.
“It will be tough. If you look at the price rises the economy has had of the last two years … we’ve got the exact same issues,” Cr James said.
“We’ve got to try and maintain service levels as they are now and cut back in other areas. Or, the other lever we’ve got is rate rises.”
Cairns councillors have prided themselves on keeping rates below CPI in past years.
Cr James said the council will stick to the CPI promise.
But with CPI at 7.8 per cent in the December quarter, the council has a lot of wiggle room.
“That always cops a lot of debate among councillors, but I think they’re aware this time we do have a shortfall,” he said.
The council in 2022 forecast a $50m shortfall over 10 years, and proposed a differential rating system on investment properties to remedy the $5m annual gap.
But after vociferous feedback and council’s data collection, Cr James said the proposal was definitely going to be reassessed.
“It was a hot topic … I’m thinking it’s tough times, so we’ve got to be careful. It will get reviewed, for sure,” he said.
Cairns mayor Bob Manning said projects will need to be reconsidered to keep the budget in the black.
“We will have to pull back, we will have to shelve. We really should have been taking these decisions earlier … the longer we leave it, the worse it will get,” Cr Manning said.
“Let’s see what happens as we go along and how many flip-flops we have, because we always have a few.”
Division 2 councillor Rob Pyne said he believed the March 2024 election sliding into peripheral view would influence incumbent councillors’ rating decisions.
“I don’t think those running (for election) again will have the appetite for (large) rate rises in an election year,” Cr Pyne said.
In his final budget deliberations as a Cairns councillor, Cr Pyne said his focus would be retaining quality of basic services.
But he expected rate rises of about five per cent would be needed to not completely sacrifice vital infrastructure works.
“I’m worried there will be a fall-off of services at street level … there’s now a lot of expense in delivering those services on the ground.”
Division 8 councillor Rhonda Coghlan said the council was stuck between a rock and a hard place in deciding whether or not to delay projects.
“There have been increases of up to 69 per cent in some project costs,” Cr Coghlan said.
“But when projects are delayed, their costs go up. We actually might see some projects … brought forward to avoid this.
“My primary concern is the big jobs, such as water infrastructure, need to happen.”
“There are the need-to-haves and the nice-to-haves, and the need-to-haves must be the priority.”
Cr Coghlan said rate rises above previous precedent were expected.
“Last year, we rated at half of CPI. At some point, the chickens are going to come home to roost,” she said.
“We’ve helped the community through the GFC and Covid, but at some point something has got to give.”
Division 3 councillor Cathy Zeiger said she expects “a bit of pain” in the form of rate rises, which were necessary to keep essential capital works in the budget.
“If rates go too low it’s not fiscally responsible,” Cr Zeiger said.
“I definitely won’t support a decrease in services, and there’s certain works I will continue to fight to death for.”
Division 5 councillor Amy Eden said she would be looking for costs to cut before hiking rates.
“We need to look at our cost base first and tighten the belt before charging the residents,” Cr Eden said.
Councillors are currently progressing through a series of budget-focused workshops and will soon engage in “scenario setting” wherein council’s financial officers will outline hard facts on the council’s financial position.
Division 1 councillor Brett Moller said the current economic climate will be factored into workshop discussions.
“Traditionally rates have had a one or two in front of them because we’ve been in periods of low inflation … but now the pendulum has swung the other way, we have to deal with that appropriately,” Cr Moller said.
“We do have to recognise the hardships residents are facing, such as increasing interest rates and CPI at (7.8 per cent). All that comes into play.”
More Coverage
Originally published as Cairns councillors ready for ‘a bit of pain’ as election year budget discussions loom
‘Bit of a doozy’: Cops charge man after Mossman party gets out of hand
A running series of brawls at a birthday party, the alleged breaking of a guest’s jaw and assault of a police officer has led to the arrest of a Mossman man on a series of serious charges.
Former Cairns CEO snubbed, replaced
Cairns councillors have unanimously voted to part ways with mayor Amy Eden’s former campaign adviser as top boss, replacing him with a highly experienced chief executive, set to start next month.