I’ve got some ideas about how council determined the 2024 rates rise

As councillors write their priorities for the city’s next 12 months on a piece of paper, bureaucrats sit poised with pencils behind their ear.

They’re nervous, because they know they’re the ones who’ll have to juggle the numbers to ensure the city can afford the lifestyle bestowed upon it by its elected representatives.

Council business comes with a big price tag. This year, it amounts to around $1.18 billion.

Somebody won $150 million in Lotto and landed on every front page in the country. We’re dished up a sum almost eight times that, and we barely give it a second glance.

Instead, we see the $130 a year we’ll have to dig from the coin tin, shrug our shoulders and cancel one of our streaming services.

What councils should be telling us when they list an array of numbers for our perusal is “how” they arrived at the 4.61% rate increase.

I’ve sat in a few lockups in my time, and I’ve seen the odd council budget. There are a few ways bean counters like to bang heads with mayors and CEOs.

Method 1:

This is in my experience the most commonly used method.

It involves the scientific research task of finding out the latest CPI rise, a number determined by economists who over a cup of tea will look at inflation, the cost of a bag of groceries, and their most recent pay packet.

They tell us how much more we’ve been paying, on average of course, for stuff over the past 12 months.

Councils will look at this figure, and over a cup of coffee because local government bureaucrats are more inclined to care less about their health than a national economist, will find a number slightly less than the CPI.

Why slightly less? Because they know that, with the help of spin doctors, it will be easier for their political overlords to sell a hike that’s “less than the CPI” far easier than one that exceeds the greed of large supermarket chains.

Method 2:

This method is less scientific than the first.

It is used by councils who are not prepared to release rates rises before other councils. Instead, they wait for the larger councils like Brisbane, who will likely release a number derived using Method 1.

After seeing the rates increases of others, they’ll choose a figure marginally less than their neighbours.

Again, this is easier to sell. “See, we’re looking after you more than the mob down the street.”

It’s possible Logan used this method after seeing Redlands kicking their rates up 5.5%, but doubt arises when we see that Brisbane restricted its hike to 3.8%.

Method 2 is a waiting game, and often made at the last minute with total disregard for the needs of the city. It is purely a public relations exercise that later becomes the problem of the bean heads who must find ways to juggle the books accordingly.

Method 3:

A rarely used method which involves considerable planning and accounting strategies based on the forecast needs of a city.

It takes the pieces of paper containing councillor wish lists, and weighs them up with forecast costs of necessary items such as roads, sewers and staff morning teas.

At the end of the process, it spits out a number being the cost of all these things combined. 

It then determines how much more than last year all these things cost, how much of that needs to come from the rates pool, and voila, you’ve got yourself a rates increase.

The risk with this method is that it could produce a blowout. Nobody will cop a 20% rates rise, which means some cost-cutting needs to be done.

Or we loan the money and make it a future council’s problem, in full knowledge that whatever we thought roads would cost this month will in all likelihood cost more next month, making the budget a futile exercise.

Hey Wanda, you know how the accountant said we could only go out once a week for dinner? Well, you’ve got an hour to get ready because I’ve got a better idea.

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