Media response - Long Term Financial Plan

Published on 17 February 2021

Response to The Advertiser.

• What is behind the CPI rates cap plan? Is there data on how debt will also decrease? Is this now possible because of the sensible financial management of Scott Ashby, former head of PIRSA? What is his view on the state of affairs at the council when he arrived there?

Comments attributed to Mayor Erin Thompson

Last night’s decision to adopt this Plan was a watershed moment for Council.

We’ve put the past behind us, and we’re moving forward as a financially responsible Council.

We’ve built a plan that directly reflects where and how the community believes its rates should be spent.

Having a sustainable and clear Long Term Financial Plan is the cornerstone of good Council financial administration.

Our Plan is founded on a suite of 16 principles developed following feedback from the community on service provision, projects, rates, and debt management.

Council staff and elected members have worked hard over seven months to put together a Plan which will make it financially sustainable and more accountable now and into the future.

We have a detailed model which sets out a trajectory for both expenditure of funds, and for reigning in and eliminating debt over the long term.

Importantly the Plan will eliminate Council’s deficit over four years, transitioning it to a balanced budget.

It will also reduce its call on long term borrowings to fund future major projects, by applying a new more conservative funding formula and applying greater rigour to decision making.

It also recognises the reality that the community expects major projects to be completed, facility and asset upgrades to be undertaken, and our community assets maintained.

Under this Plan, our current services will be maintained, and where clear decisions are made by Council, improved.

It recognises that rate increases will need to reflect CPI increases, as our costs go up. 

However any decisions to increase rates beyond CPI will need to be transparently made by Council, informing the community of exactly what those funds will go towards, and ringfencing them for that use.

So the community can see where their money is going, and that they get what they paid for.

ENDS

Clarifications

The LTFP does not incorporate a rates cap.

What is does is increase costs at CPI to maintain existing services, as supported by the community in the recent engagement.

Revenue is then projected to also increase at CPI to cover the costs to maintain existing services.

Rates can increase above CPI but this would require a transparent decision by Council and ringfencing of the funds for that purpose only.

Rates are set to increase in line with CPI, which for financial modelling purposes has increased to 2.5%, roughly in line with the Australian Government’s CPI target (as per the RBA). Actual CPI will be identified during each annual budget process.