The Phantom Budget Items

Ever wondered why your rates in South Gippsland Shire are higher than many other comparable Councils?
Perhaps one of the reasons is the Phantom projects that get listed for Capital Funding. In

the year 2018-2019 they cut around $1.2M of capital projects from the funding within 12 months of

saying they needed that project. That was around 3% of the total rate grab.

It has been even more breath taking in the current year. Just 4 months after adopting the Budget in

August 2019, the Council cut $1.8m from the funding needs in December 2019. That was around 5%

of the rate grab in this last year. How did these supposed needed Capital Spending items suddenly?

disappear basically before the ink was dry?

This may not seem to be a big issue but for the average ratepayer the extra rates you have paid for

no reason are as below: –

Year Average Rate percent not spent Cost to ratepayer

2018-2019 $1750 3% $52

2019-2020 $1850 5% $92

The problem is the Council do not return those extra funds to the ratepayers before they decide to

grab further funds. This has a compounding effect on what they take. If we consider the current

year, the proposed 2% rate increase and changes in property valuations will see the average rate

increase to around $1920. If we did not have these phantom items in the Budget your average rate

may have looked like this.

Year Average Rate Capped rate Year Adjusted Average

Less phantom expend increase rate

2018-2019 $1700 2.5% 2019-2020 $1742

2019-2020 $1650 2% 2020-2021 $1683

You can see that the difference from what is in the Budget – $1920 to $1683 = $237 extra in the

coming year.

This shows that the phantom capital expenditure items leads to an increase in the average rate of

13.9% over just 2 years. This is why we have such exorbitant rates in this Shire.