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Name it Domain!

Council’s gravy train keeps rolling on

09 Jun 2016

Council’s gravy train keeps rolling on Image

Editorial comment by Shane Scanlan

The City of Melbourne is embarking on a hiring binge, which will see another 80 staff swell its already top-heavy ranks in the next financial year.

The bill for its 1400 staff will be $151.6 million next year – $12.2 million more than this year.

And an examination of its draft 2016-17 annual plan and budget reveals that ratepayers should not expect to get anything extra in return for being slugged 5.6 per cent more next year.

The council will be taking 7.7 per cent more from residential ratepayers in 2016-17, while non-residential ratepayers can expect to pay 2.2 per cent more.

The total rate harvest will be $257.3 million next year – $13.6 million more than this year.

Somehow, the council has been able to spin this effort as a “modest rate increase of 2.5 per cent”.

Finance chair, Cr Stephen Mayne, said: “This is a disciplined budget that minimises the burden on ratepayers and provides the services and infrastructure appropriate for a booming capital city.”

“Our underlying cost increase in this budget is less than 2 per cent, which is expected to be below CPI. This means we have minimised the burden on the community while accommodating pressures associated with the city’s growth and the operation of new community facilities.”

The council’s spin continues throughout the draft document, specifically in what it considers to be “capital works”.  While boasting a “total capital works expenditure of $96.48 million”, a closer examination reveals some curious inclusions.

Two thirds of this figure is actually earmarked for maintenance and renewal.  When addressing “new works”, it says:

“For the 2016-17 year, $19.15 million will be expended on new works. The more significant projects include, climate adaption urban landscapes ($2.66 million), bicycle improvement program ($1.56 million), green your laneway pilot projects ($1.30 million), new flood mitigation works ($1.00 million), implementation of Docklands community and place plan ($1.00 million), Christmas Festival new decorations ($0.60 million) and road safety program ($0.56 million).”

Not surprisingly, the council does not draw attention to a $13.2 million IT spend, which is also lists under its works program.  And the spending doesn’t stop next year.  

The council has flagged spending an extra $14.8 million on IT in 2017/18, $15.1 million more in 2018/19 and $8.5 million in 2019/20.  

It hasn’t said why it thinks it needs to spend in excess of $50 million on IT. 

But, if the council was an organisation that concerned itself with internal efficiencies, it could be presumed that such a spend might result in staff savings down the track.

However, the city wants both the big IT spend as well as more staff in the future.  Its four-year plan predicts it will spend $173 million to employ 1443 people by 2019/20.

In my view, the council didn’t need to raise the rate burden at all for 2016/17. 

With more than 5000 new properties coming on stream, it was destined for a $6.52 million windfall based on projected building completions.  

Unlike outer-fringe municipalities, the City of Melbourne is not required to provide costly infrastructure for these new (mostly) apartments.  It’s a legacy of its prime location – a gift.

It doesn’t need to employ 80 new staff and it doesn’t need to budget for a $15 million surplus. 

The fact that is has a $320 million investment portfolio illustrates its vastly inappropriate wealth.

If the council was focused on investing its wealth in community outcomes, it would be a completely different story.

It has earmarked $1.1 million for transforming Southbank Boulevard and Dodds St into a linear park, but has offered nothing to upgrade City Rd.

The underlying story about the City of Melbourne is that it is a big, fat job creation program.  Councillors have limited opportunity to influence this juggernaut.

Some 167 officers are on salaries of more than $136,000, with directors being paid more than $300,000 and the chief executive officer on $460,000.

When I look at the City of Melbourne, I see a club run by a handful of obscenely-paid career bureaucrats who can’t believe how good they have it and are determined to keep it that way.

The document will go before the Future Melbourne Committee for endorsement on June 16.

To view the budget visit:

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