I am pleased today to present Cairns Regional Council’s Budget for 2016-2017 - the first Budget for this new term of Council and one that will again provide for important community infrastructure without placing an undue burden upon our ratepayers.
It is a Budget that treats ratepayers’ money with the trust and care it deserves; one that delivers minimum rate increases; and one that seeks to drive confidence in the community and stimulate our economy.
This $287 million Budget is the fourth consecutive balanced Budget to be delivered by this Council, accompanied by low rate rises, and that achievement is no mean feat in a fiscal environment that is testing all levels of government.
At a time when funding from higher levels of government for local councils is diminishing, Council has improved efficiencies and developed ways to deliver ongoing value for money.
This focus and determination to make our business cost-effective and efficient will result in a surplus in our operating position of the order of $6.3 million for the 2015-2016 year, bringing the total operating surplus over the past three budget cycles to $21.8 million.
We will continue to manage this Council under a business model that seeks to identify further operating efficiencies and act on opportunities to cut red tape to ensure that we are maximising the community benefit from every dollar we manage.
In this Budget, Council has determined to restructure its debt in order to minimise the interest on existing loans which have a current balance of $75 million.
This type of refinancing is common now in commercial organisations, and indeed in the family budget, with many people choosing to opt for different financial institutions to save interest on their loans or credit cards.
By re-financing our debt, Council will cut its interest rate from 7.43% to around 2.5% which will save well in excess of $2 million over 10 years.
There will be a cost to complete this exercise, but the savings are real and it is the best way to service our current debt level which will still be the second lowest per capita among medium to large councils in Queensland.
One of the key components of the Budget is Council’s Capital Works program which we recognise is a significant contributor to the city’s economy and business and consumer confidence, It has been a guiding principle of this Council to keep our capital works at the maximum possible level whilst having regard to Council’s long term financial goals.
We have done that again this year, with a record Capital Works program of $178.5 million including $36 million for our hallmark project, the Cairns Performing Arts Centre.
I sincerely believe this is important community/social infrastructure which, in the context of the “Northern Australia” philosophy promoted by the Federal Government over the past 12 months, warrants financial support from both the Federal and State Governments.
A dialogue was opened with both levels of senior Government in June 2015 in regard to financial support for the construction of the CPAC. To date, the State Government has given conditional support whilst the Federal Government is yet to formally respond.
The project will deliver a facility that will benefit not only the residents of Cairns but communities throughout the Tropical North Queensland region.
Taking into account forecast capital works for the next two financial years, Council will deliver more than $470 million to expand and improve its community assets over that period.
During this year’s local government election, the people of Cairns had the opportunity to judge Council on its financial management strategies and actions and how this translated to in relation to what the organisation has been able to achieve and deliver.
The community clearly values sound fiscal management as employed by our Council in the previous term and one that will be carried through this term, and support the vision put forward for Cairns to focus on its future in becoming a “smart city”.
This Budget allows for the commencement of key election pledges including:
- $250,000 to undertake a scoping study to review the future transport needs of this region, with a view to establishing whether Cairns can support light rail.
- $150,000 to undertake a masterplan of Cannon Park racecourse to identify how this under-utilised area could be redeveloped into a multiple purpose facility.
- $200,000 to determine the scope and possible staging of a rectangular stadium in Cairns; and
- $30,000 to undertake Local Area Economic Development strategies for Babinda and Gordonvale and examine the potential for development and investment in these townships.
Council will also place a high priority on incorporating a “smart city” focus across all organisational activities and this will be reflected in our new Corporate Plan to be developed in the next 12 months.
Another key initiative of Council over the past four years, which has seen a further commitment during the recent election has been to inject funds into the renewal of basic infrastructure in our suburbs – kerb and channelling, sealed road shoulders, and footpaths. This year, we have again boosted this fund to accelerate a lot of these works, allocating $6.2 million for suburban enhancement – a significant increase from the $2 million allocated to these works in 2012.
Rates and Charges
In striking the rate in the dollar for 2016-17, Council took into account that land valuations across Cairns have risen markedly, with the median residential category increasing from $165,000 to $177,000.
Taking this into account, Council is in a position to reduce the rate in the dollar in residential categories by up to 6.5% to ensure that 66% of ratepayers will only receive a rate rise of 1.5% or less.
This is the third consecutive year that Council has managed to keep the rate rise to 1.5% and our long term financial position indicates balanced budgets going forward with rate rises expected to be at or around CPI.
A 1.5% increase will also be levied on sewerage and cleansing charges and the water access fee, with residential water usage to rise by 2 cents a kilolitre.
To assist our community and not for profit organisations, Council this year will change its Rates Based Financial Assistance Scheme to make these groups eligible for the full 100 per cent discount of their general rate.
Previously, different types of organisations could apply for varying levels of assistance, but the new policy will give equal treatment to all clubs, provided the clubs do not operate poker machines or other gambling facilities. This change will benefit 61 clubs.
By waiving rates for these organisations, we are supporting the efforts of these groups and their volunteers who serve the community.
Stimulating the economy
This year’s Budget serves to stimulate our economy through a number of measures including:
- $370 million will be spent in the community through materials and services associated with delivering a significant Capital Works program; and for maintenance, renewals and other services delivered to the community;
- $2 million for Tourism Tropical North Queensland and $1 million for other tourism initiatives aimed at driving economic activity by marketing the region as a premier tourist destination;
- $300,000 has been provided to support the initiative by Tourism Tropical North Queensland to establish Cairns as the gateway to the Great Barrier Reef through the Citizens of the Great Barrier Reef campaign.
- $1 million to support and develop major sporting events that will deliver economic benefits to the region including the Cairns Ironman, the 2017 Mountain Bike World Championships, and AFL and NRL games;
- $470,000 for economic development and to support business and industry development; and, as mentioned earlier
- Funds to develop an Economic Development Strategy for Babinda and Gordonvale.
As stated earlier, this year we will fund a record Capital Works program of $178.5 million, with a further $163 million works planned for the next financial year.
This year, the program includes $37.5 million on water and waste operations; $68.7 million on transport and drainage; and $60.8 million on community, sport and cultural facilities.
Heading the projects is $36 million to commence the new Cairns Performing Arts Centre and to complete the redeveloped Munro Martin Parklands – important community projects that have remained unresolved on the city’s agenda for far too long.
The continued revitalisation of the CBD will be realised with $10.6 million to be spent to complete Stage 2 and undertake Stage 3 of the Shields Street Heart project; and $6.7 million to refurbish the School of Arts building and complete the fit out required to house the Cairns Museum.
Included in the Capital Works program is significant funding for projects across the city including:
- $5.5 million for Stage 2 of the Walker Road sporting precinct.
- $3.1 million for new cycling infrastructure including the new Mann Street path ($968,000) and the Ryan Weare Park bridge ($900,000).
- $2.1 million on improvements to a number of sporting facilities including $800,000 to expand fields at Peterson Park.
- $6.7 million on drainage improvements across the city including the initial implementation of the recently adopted Saltwater Creek and Mount Whitfield North Drainage Management Plans.
- $9.37m for reseals, overlays and pavement rehabilitation to maintain and improve our roads.
- $10.5 million for bridge replacement and renewal, including $3.8million for Rudge Bridge at Josephine Creek, and $3.1million for the Collins Avenue Bridge.
- $1.3 million for footpath renewal and construction, and,
- $1.79 million for street lighting upgrades.
In addition to these items, the Budget also allows for:
- $1.3 million for lifeguard services at the Lagoon and local beaches
- $1.7 million in security services to boost safety in the CBD
- $1.2 million in grants to support community events and a variety of organisations, and $300,000 to provide support to cultural organisations to improve their facilities.
In closing, Council has spent considerable time striking the right balance in this Budget and I believe we have got it right.
This Budget delivers on all fronts. Importantly, it once again offers some relief to rising cost of living pressures and cost pressures on small business across the board.
While Budgets are by their very nature financial, and many people see them merely as a bunch of numbers, this document means so much more to our community.
This is the plan that responds to our residents’ needs and represents Council’s commitment to ensuring that Cairns becomes an even better place to live, play and do business.
Today’s Budget continues to build on the positive changes implemented over the past four years, it also provides for a sustainable local government that is well positioned to prosper from the opportunities before us.
I would like to thank and commend my fellow Councillors for their time and input in preparing the Budget and acknowledge the efforts of Council management and staff throughout the budget process and in preparing the reports to be considered today. I also applaud them on implementing the 2015/16 Budget.
I commend the 2016-2017 Cairns Regional Council Budget to you for its adoption, and I will now deal with the respective resolutions: