Mines to pay more
Thursday, 30th June, 2011
By Craig Brealey
The local mining companies will have to contribute more towards helping the city out of its debt.
City Council last night voted to get rid of the contentious cap on mine rates and have the companies pay the three per cent rate rise like everyone else.
At its monthly meeting councillors approved a budget that will run into a deficit of $750,000 and require Council to borrow $1.5 million next financial.
The two options put forward for the budget were to keep the income from mine rates at $3.2 million a year for five years or apply the 2.98 per cent residential rate increase across the board.
Councillors chose the latter to take some of the burden off residential landholders.
The mine rate has been capped since 2005.
The councillors also voted to cut Council spending by three percent and to form a review committee to look at ways of reducing the deficit over the next financial year.
A recommendation to double the entry charge to the city pool, from $2 to $4, was knocked back, as was another to raise by $1 the $10 airport landing fee it charges the Rex airline for each passenger.
Councillor John Groenendijk, who moved that the mining rate cap be scrapped, said that the mines could well afford to pay more to help the city.
Clr Groenendijk told the meeting that Council wanted a “good relationship” with mines but that right now in Australia the companies were “making substantial windfalls with mining and on the stock market.”
Councillor Tom Kennedy backed the move and also suggested that if Council cut its operations expenditure budget by three per cent it could save $870,000.
However, this will not apply to projects that are already fully funded.
The proposed cut will be considered by the review committee.
This will comprise councillors and include, at the suggestion of Councillor Darriea Turley, independent accounting advice, possibly from Broken Hill’s sister city council, Bankstown.
Councillors Kennedy and Bob Algate voted against accepting a deficit budget, arguing that it would put an indebted council further in the red.
“We are continually borrowing money to do capital works because our operations budget has been blown out of the water,” Clr Kennedy said.
“There would have been plenty of money ... if Council had done a better job over the years.”
Clr Algate said removing the mine rates cap was “long overdue” and that residents and businesses who were “doing it tough” had been right to ask why the mining companies deserved such a favour when they were given none.
However, he said Council should not keep ignoring advice from its auditors that its method of operating with deficit funding was “unsustainable.”
“The cash flow is in a perilous state and we may have to borrow to fund day to day operations .... there is little doubt in my mind that such an organisation is insolvent.”
Clr Groenendijk replied that the deficit was a fact but that something could always be done.
“We are in deficit and we have to accept it and act to improve it,” he said.
Mayor Wincen Cuy told the meeting that the deficit represented two-and-a-half per cent of Council’s budget but that “we can work our way through it.”
“We will look at it, and we will have the review committee, so that at the end of the financial year we don’t have a $750,000 deficit.”