By Michael Giles
IT doesn’t surprise me that one of the founding fathers of the United States, Benjamin Franklin, was also a successful newspaper publisher in Philadelphia.
In this business, as he also discovered, it pays to maintain healthy scepticism towards government and politicians and you can include local government in that space.
One of his most famous sayings was: “Believe only half of what you see and nothing of what you hear.”
That adage could easily be applied to the new Bass Coast Shire budget, and, in fact, to any budget produced by government.
Because the reality is, as the Mayor Cr Pam Rothfield admitted last week, it’s almost impossible for the lay person to understand what’s really going on below the surface of the headline claims about ‘Budget Highlights’.
It’s good news, for example, that the shire is finally finding money, not only to develop much-needed new facilities, like Wonthaggi’s new sports stadium, but also to renew woefully neglected assets such as the Wonthaggi Arts Centre, while agreeing that it can fund the Inverloch Transfer Station and Surf Parade pathway after all.
In fact, after the shire borrows an additional $4.3 million this year to match some of the government grants it hopes to secure, and our total borrowings balloon out to $16.8 million by June 30, 2018, we’re already in good shape to pay off $6.6 million of that debt the following year.
It’ll drop back down to $11 million by June 30, 2019, we’re told.
And according to the shire CEO, Paul Buckley, we already have almost $6 million of that money in reserve ready to go.
So why borrow the funds at all? Because, according to Mr Buckley, they’ve done the sums and it’s better to retain that money in reserve until the loans fall due in the 2018-19 financial year.
Of course, you’re unlikely to see information about our reserves, or the financial viability of the shire, clearly laid out in the ‘Draft Annual Budget 2017-18’ just released by the council for public comment.
One of the council’s own members, Cr Les Larke, for example, claims the shire is in line to record a $31 million operating loss for the five years to June 30, 2017, while Mr Buckley says the financial statements for the four years to June 30, 2016 show a “cumulative operating surplus of $14.53 million”.
Who do you believe?
With a forecast operating surplus of $1.416 million this financial year, the operating surplus for the five years will actually be $15.95 million, Mr Buckley says.
That’s a $46 million difference of opinion between CPA Cr Larke and the CEO, but it comes down to the way you calculate it, we’re told, so good luck with trying to make meaningful comment about the budget.
But good on Les Larke for at least trying to hold the shire to account.
That aside, the shire council has produced a budget with a lot more positives than we are used to seeing at this time of year, which according to Mr Buckley is the result of three years of hard work on service reviews, cost cutting and efficiencies.
Saving $250,000 to $300,000 a year on the closure of the Wonthaggi Information Centre (now run by the community), is a case in point.
He says we have saved $6 million in the past three years and he’s determined to deliver another $4 million in savings over the next three and a half years… while retaining the same staffing levels.
It makes you wonder what the hell was going on in the years before that when the shire council and administration was leaving us disgracefully exposed on capital replacement, with a renewal gap that was consistently the worst in its group of 19 large rural councils.
If it looked like the shire was doing nothing new then, you were right.
And you can bet your life the councils and executives that ruled the roost in those years also told us how good their budgets were.
The present council and its CEO Paul Buckley are talking a big game with their new budget, and if the government grants they have applied for come off, we may well see some significant improvements.
Increases in rates and charges have also been kept to a minimum.
But if you take the advice of old Ben Franklin, you’ll wait and see before giving council your official seal of approval.