Why Noosa Council has a mountain of cash it doesn’t need

How do we find ourselves here? With Noosa Council stashing a mountain of cash it doesn’t really need, while it keeps whacking ratepayers with a total general rate increase that’s above inflation.

Let’s come back to that pile of cash in a moment, but first in the words of the advertising slogan – let’s compare the pair. The pair of budget stories.

On one hand, we have a slick Council PR machine selling us this ‘Back-to-basics’ budget to keep rate rise below CPI’.  And…that Council hard work has saved us from the catastrophic impact of big land revaluations two years in a row.  63% of ratepayers will only pay 5.5% more on their rate notice, well under inflation at 7.4%. Thank you Noosa Council.

But, hang on, there’s another version that’s devoid of Council spin, and it goes like this.

What about the forgotten 5,000 property owners whose rates in the draft budget are set to rise by more than 10%, or the giant rate rise of more than 20% for over 1,000 of them. 

There’s no detail on this in the Council media release, but there is in the Draft Budget Information Pack on the Council website for the few who know what to look for.

Below are some charts Noosa Council would probably rather you didn’t see.

But first, a big thanks to staff for their efforts in designing and continuing the publication of the Information Pack. Without that transparency we would not be able to reveal how the draft budget will continue the ratepayer rip off of the last few years if it’s adopted without significant surgery.  

So let’s ignore the hard sell from the recently created Office of the Mayor & CEO, and look under the bonnet of this draft budget that takes effect from 1 July.

Our Councillors don’t need to be economists to understand that the more rate revenue you decide to collect, the more ratepayers have to pay. 

So if they know that “residents are struggling with cost-of-living pressures”, why have they agreed to an overall increase in general rates of 8%, even higher than inflation?

Why does the Council keep raising total general rates so much when they claim to  know that business and families have been badly affected in recent years by Covid and inflationary costs?

Other Governments have been helping where they can, as have many other councils. Check out what our Council has been doing since March 2020 that has added to our cost-of-living.

The chart shows that total general rates will have risen by 40% in the four budgets of this Council while CPI has increased a total of 18%.

What’s happened to all of that extra money from a Covid affected community now suffering from high cost-of-living?

Perhaps better maintenance of roads, paths, parks and public areas? Better control of short term accommodation businesses in residential areas?  Better services? Return of the annual bulk rubbish  pickup for households? How exactly are Council’s big rate hikes improving our lives?

If you haven’t noticed any improvements, you wouldn’t be alone. So where has all the extra money gone? 

Part of the answer is the big increase in staff costs. They increase annually from growth in both wages and employee numbers.  

Here’s what’s happened over the last few years, including the 2024 draft budget allocation.

Despite the unprecedented 46% staff cost budget increases in just 4 years, there’s a lot more to the story that’s even more disturbing. 

It turns out that the Council has been banking increasing amounts of our money. Yes, each July 1 they keep imposing large rate increases, and the Annual Report shows a large increase in cash they didn’t need at the following June 30. 

And where does the cash go? It just remains in the bank while it keeps increasing. Council obviously considers that’s a better use of your money than you keeping it to spend on things you might need. 

And they’re at it again in the draft budget.

That’s happened for some years now, and this chart shows unused cash sitting in the bank.

‘Unrestricted’ cash is held by councils to cover operational expenses for a few months if there is a temporary cash flow problem, for example if rates notices were delayed.  It’s also known as Cash Expense Cover. 

The next Cash Cover chart is taken from the monthly financial report to Council’s May General Committee last month. Our elected members see the updated position every month. 

Noosa Council’s own target is enough cash to cover 3 months of costs (the red line), with a maximum of 6 months as shown by the broken yellow line on the chart. That level is accepted as prudent by the Queensland Audit Office, 12 months is excessive.

Look at the cash cover at June 30 last year. There was so much cash it could have covered Council cash expenses for 13 months. Yet they still increased general rates by 11% last year.  Why?

The result is obvious from the chart. At the end of April, the cover was an excessive 13.2 months, more than twice the maximum. 

And increasing rates to build a pile of cash that’s ‘surplus to requirements’ just makes things harder for people doing it tough.

This increase and amount of cash is totally at odds with the Council’s own Financial Sustainability Policy. The first objective of the policy reads:

Council operates in an efficient and effective manner, minimising general rate increases.

It is perfectly clear that ‘sympathetic’ comments from Council about the effects of covid and cost-of-living inflation have not been matched by their actions. 

Is it reasonable to ask if everyone is asleep at the wheel in Pelican Street? Surely some senior staff are aware of the situation, or have most of the squeaky wheels either left in disgust or been eased out? Whatever the problem is, we have a right to expect some financial leadership from our elected Council. 

What does it say about a council that levies increasing amounts of money it doesn’t need?

And now they propose to do it again this coming financial year!

Once again we are invited to have our say about the draft budget. 

I say Council should take the $5.5 million increase they think they need in this budget from the pile of ‘unrestricted’ cash sitting in the bank. Imagine, no increase in general rates at all!

The last time that happened was in 2014. 

And they should think about repeating that for the next few years. Excessive amounts of cash at bank might just get back below the maximum 6 months cover of their own policy. And that’s more than enough cash cover according to the Queensland Audit Office.

Better still, a message to Council.  How about reducing your expenditure as well as the proposed general rate increase of 8% by complying with your own policy and getting back to basics as you are promising. 

Adrian Williams is President of Noosa Shire Residents & Ratepayers Association

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This Post Has 5 Comments

  1. Avatar

    Firstly, a big thank you to those that regularly contribute to Noosa Matters – well done. As self-funded retirees we have always paid our own way. We have independently objected to Council in writing about the pending rate rises, especially when they are not delivering on numerous matters we as residents care about. The budget feedback survey is totally inadequate and does not really allow for feedback on rate increases. Using the proposed 2023/24 rating information supplied, we have calculated that our general rates will increase by 12% and total rates will increase by ~9.5% and consider this highly discriminatory and unwarranted. I’d love to see Council required to provide a breakdown of how many properties will pay lower rates, will pay between 5 to <6%, 6 to <10%, 10 to <20% and over 20%. Clearly Council needs to be more transparent and give the whole picture not just a limited view to provide a positive spin.

    1. Noel Playford

      Randal, you can find the information you are looking for at https//yoursay.noosa.qld.gov.au. The information is at page 15 of the document titled 2023-24 Draft Budget Information Pack. Council finance staff have provided very useful information about the draft budget. Those who spend some time will discover that the mainstream media reporting is little more than repeating the self serving comments from Pelican Street that ignore the reality for many ratepayers.

  2. Avatar

    What we voting Noosa Shire residents need to do prior to next year’s council elections is to make sure that we have answers from all aspiring councilors and Mayoral aspirants from questions we can pose to them on which direction they would like to see Noosa heading in areas of development, population, tourism, and how they would ensure that any decisions that they make is for the benefit of all Noosa shire residents – not just ratepayers that do not reside in the Noosa area.

  3. Noel Playford

    The QAO audits Queensland councils every year. They have made recommendations to councils about appropriate cash cover, but have no power to dictate the relevant level of unrestricted cash. That is the responsibility of the elected Council. We will soon see if our elected Council is prepared to be responsible and act on the suggestions above by amending the draft budget. They acknowledge people are doing it tough, those people need action, not platitudes.

  4. Avatar

    Would it be appropriate to ask the Queensland Audit Office to do an audit in this situation?
    Their website states that ‘As taxpayers, you have a right to expect that this money is spent wisely and honestly’.

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