One of the perplexing philosophical questions is what do the current generation of people owe to future generations?
Since 1945 the two existential versions of this question have been controlling the risk of nuclear annihilation and combatting climate change.
Yet there are many non-existential versions of the question. For instance, while no one would associate the City of Port Phillip with the risk of nuclear war it is arguable that its role in combating climate change is significant. Equally its role in planning for the security, amenity and lifestyle of future generations is also significant.
Yet its latest 2023-24 Budget rate rise restriction is, as a local group Progressive Port Phillip (PPP) puts it, an “intergenerational theft of community resources needed to secure our city’s future.”
How come? The 23/24 draft budget papers state that adopting a rate rise of 2.8% for the city, rather than the statewide rate cap of 3.5% saves about $900,000 in a budget of $248 million.
So what? you may ask. That’s just a rounding error. But over the next decade it will be about $11 million less in rates and the gap will be funded by reductions in reserves covering property needs, asset renewals and growth demands – all essential in a municipality which has many well-established assets but also has a growing population and increased development pressure.
The problem is not just some political point raised by the PPP but is demonstrated by the Essential Services Commission advice to the Victorian Government on 2023/24 rate caps. The ESC said: “A rate cap that is lower than the CPI forecast may be beneficial for ratepayers in the short term. However, a rate cap could deepen financial sustainability issues for councils, which would ultimately be born by ratepayers and the community in the longer term.”
It’s also not as if Port Phillip doesn’t have immediate and urgent needs. It is facing a housing crisis and the Council’s refusal to partner with the Victorian Government’s Big Build program is a massive missed opportunity to provide more affordable housing.
Climate change threatens flooding in Port Melbourne, Fishermans Bend, St Kilda and Elwood.
The city also faces major problems caused by the then Victorian Planning Minister, Matthew Guy, rezoning the industrial Fishermans Bend area in 2012. In doing so he failed to plan for likely developments and provide proper infrastructure. Instead, he delivered huge windfall profits to developers (including Liberal Party donors). The Liberal land deals scandals which played a big role in getting the long-term post war Liberal Government thrown out of office were minor compared to the Guy scandal.
There are also crises in aged care provision, child health centres, early childhood education and care centres, libraries, arts and cultural hubs and community centres. As PPP points out a major upgrade of the St Kilda Library has been deferred – a blow to the belief that libraries play a critical role in equal access to information for the disadvantaged.
You can also bet that if Council gets through this crisis there will be yet another restructure and more merry go rounds for managers too busy in meetings to make decisions.
Nevertheless, in thinking about all this observers have to ask that eternally valid question – Cui bono? Who benefits?
Well, you need to know a bit of background to answer that. For some years a small group of residents owning properties valued at similar prices to the best houses in Sydney have been campaigning under the banner of poor put upon ratepayers facing unfair imposts on their multi-million dollar homes.
They have had election success but don’t thankfully yet control the Council. However, as the Council is evenly split between progressives and ratepayers with a couple of independents in between it is extremely difficult to get things done. Let alone, as regular readers will know, even without the general incompetence of the managerialist Council administration.
But the millionaire property owners have had a success of sorts thanks to the City’s latest budget. They have saved all of $120 a year on the rates on a $10 million property while generously offering a $9 dollar ‘saving’ for a $750,000 property.
They have also successfully shifted the Council’s focus from what has been the hallmark of municipal governance since the mighty mid-Victorian reforms of British municipal councils to Reaganite and Thatcherism’s negation of what constitutes a healthy, fair society.
Moreover, as PPP says – the 49% of Port Phillip households who are renting will share none of the benefits the millionaire property owners are gaining, nor the gains of those absentee landlords who have enjoyed unprecedented increase in their asset values since the worst days of the COVID-19 pandemic.
But then that’s probably exactly what the rate reducing push hopes to achieve.