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Speaker 1: Now will a cap on rates solve our financial problems?

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Speaker 1: A New South Wales mayor whose city implemented them told

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Speaker 1: a Local Government New Zealand conference today that we should

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Speaker 1: be very careful what we wish for. Sue Heines is

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Speaker 1: the mayor of Northern Beaches in Sydney and Australia High suit. Hello,

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Speaker 1: what's your experience of a rate cap?

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Speaker 2: My experience of a rate cap. I've been in local

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Speaker 2: government now for about twelve years and I've been through

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Speaker 2: too well. Every year there's a rate cap in New

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Speaker 2: South Wales. So we have a rate capping system where

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Speaker 2: an independent body decides what percentage our rates should go

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Speaker 2: up to cope with all the renewal and repairs of infrastructure.

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Speaker 2: And quite often that number or that percentage number that's

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Speaker 2: chosen is nowhere near the reality of how much it

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Speaker 2: actually costs to repair things. So over the last ten years,

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Speaker 2: many councils in New South Wales are slowly being strangled

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Speaker 2: to death with their lack of funding coming in for

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Speaker 2: the enormous costs of looking after a local council.

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Speaker 1: So is it not even enough what you guys are

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Speaker 1: bringing in? Is it not even enough to cover just

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Speaker 1: basic maintenance and repairs. I would say that's probably close

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Speaker 1: to the truth. For us, we have at least two

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Speaker 1: major weather incidents every year that need repairs. We have

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Speaker 1: a lot of flooding on in our area from Manly

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Speaker 1: to Palm Beach in Sydney, a lot of coastal erosion

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Speaker 1: and at least and we can have bushfires as well.

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Speaker 1: So we have at least two major weather events where

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Speaker 1: there is damage to infrastructure, whether it's roads, bridges, that

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Speaker 1: kind of thing, and it will mean that we have

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Speaker 1: to apply to the government for some disaster fund recovery.

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Speaker 1: Quite often, even if we're successful, we don't get as

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Speaker 1: the amount back of what it cost us to repair it,

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Speaker 1: and quite often we don't get paid it until about

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Speaker 1: four to six years after the event actually happens. So

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Speaker 1: you end up being a little bit of a credit

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Speaker 1: card where you're handing out the money and hoping money

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Speaker 1: comes in to fill that credit card payment. Does it

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Speaker 1: not have the effect like having a limited pot of

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Speaker 1: money which you're constrained by Does that not have the

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Speaker 1: effect of forcing you to cut your cloth? So if

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Speaker 1: somebody comes up with the idea of having a really

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Speaker 1: nice light installation down the road, No, you can't afford it.

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Speaker 1: Like anything that as a luxury just gets cut.

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Speaker 2: It does make you think very carefully about what the

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Speaker 2: bang is for your buck that you're going to get

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Speaker 2: because you want to make sure that everything goes further

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Speaker 2: and makes a difference. However, it does mean that like

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Speaker 2: you're also looking at where the biggest cost savings can be.

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Speaker 2: So it might be things like certain type of led lighting,

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Speaker 2: which we did and that saves us about one and

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Speaker 2: a half million dollars a year. But you're also you're

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Speaker 2: also getting a bit strangled by the fact that you're

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Speaker 2: being really deliberate now about what you can and can't afford.

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Speaker 2: So the nice to have which make your community a

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Speaker 2: special place to be does start getting a bit strangled.

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Speaker 2: And we do love We know that for people's own

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Speaker 2: social and mental well being, creative, being immersed in the arts,

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Speaker 2: having things like libraries are really important. And these are

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Speaker 2: things that we don't really want to pull back on

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Speaker 2: because we know that those things are important for social cohesion.

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Speaker 1: Okay, so it seems like we are sitting at opposite

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Speaker 1: ends of a spectrum here. You guys are incredibly constrained

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Speaker 1: with what you are able to spend. Our councils in

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Speaker 1: New Zealand, on the other hand, are profligate, right, They

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Speaker 1: just spend like it's unbelievable the crap that they spend

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Speaker 1: money on. So maybe your examples not not where we

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Speaker 1: want to be, but where we are is also not

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Speaker 1: where we want to be. So what's the solution in

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Speaker 1: the middle?

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Speaker 2: I think, And I could hear from the leaders that

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Speaker 2: I was listening to this morning, they're obviously trying to

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Speaker 2: find a model that works. And I would say, don't

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Speaker 2: look at New South Wales because I can tell you,

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Speaker 2: like I said, we're being strangled to death here with

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Speaker 2: the tap being tightened and tightened and tightened on us.

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Speaker 2: But the reality of it is, I think there really

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Speaker 2: has to be a very open and strong discussion about

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Speaker 2: what is it that the community actually want, because it's

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Speaker 2: very easy to turn this into a political argument where

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Speaker 2: it'll be very easy for one side to go we

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Speaker 2: don't want to rate rise because we care about our community,

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Speaker 2: and of course everyone goes yay, that's how I feel too.

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Speaker 2: But the reality of it is you need to have

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Speaker 2: funding in there. Most people don't understand how complicated a

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Speaker 2: council is you need to have funding up your sleeve

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Speaker 2: for things like unexpected weather events, the assets, the bridges,

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Speaker 2: everything else that needs to be maintained to just keep

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Speaker 2: it at a satisfactory level. Doesn't even have to be

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Speaker 2: at a great level, but you need to have it

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Speaker 2: at a satisfactory level that people kind of can use

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Speaker 2: things that council provides safely.

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Speaker 1: Yeah, fairpoints. So thank you very much for the time.

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Speaker 1: Appreciate it. Sue Heine's mayor of Northern Beaches in Sydney.

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