By Cam Lucadou-Wells
A rates freeze or a stimulus package?
Greater Dandenong councillors are tossing around options to cushion ratepayers from an anticipated economic recession during the COVID-19 pandemic emergency.
Cr Peter Brown raised the idea of freezing rates in 2020-21, saving households from a rise of about $35.
The median residential rates and waste charge bill would remain at about $1406.
Cr Brown said the world faced an “economic downturn” not seen for a generation, with jobs, businesses and property values falling by the wayside.
“We cannot plan to spend what we know we will not be able to receive.
“Long after the virus has gone and the funerals have diminished, residents will have lost jobs, landlords will be unable to retrieve rents, small businesses will have closed and people will be cash and credit poor.”
By foregoing the 2.5 per cent capped rate rise, the council would shave up to $4 million from the council’s bottom line.
Cr Brown said it would mean putting on hold a “big ticket item”, such a sports pavilion construction, or one of a “bevy of masterplans”.
“We would have to manage on (the same as) what we’ve got last year.”
He forecast that the State Government may force the council’s hand in any case.
“If this (pandemic) goes on for more than two months, no state government would want to increase fees and charges.”
Cr Matthew Kirwan said he favoured a local stimulus package.
With strong finances, Greater Dandenong could borrow on historically low interest rates and bring forward its program of “shovel-ready” projects.
Priority would be given to the projects that promote the most economic activity, Cr Kirwan said.
A rates freeze – with the corresponding capital works cuts – would further jeopardise jobs and send the local economy into recession, Cr Kirwan said.
“If you’ve got a serious threat of recession, the last thing you want to do as a government is to stop spending.”
Mayor Jim Memeti said the council should weigh the “pros and cons” and make its decision based on “the evidence”.
“A rates freeze might sound good. But before we make policy on the run, we should get a report from the council directors given it’s a rate-capped environment.”
A 12-month freeze would lead to a compounding loss of revenue for the council – more than $20 million over the next decade, Cr Memeti said.
Due to the state’s rates capping regime, the council would be unable to recoup the lost income in future budgets, he said.
Whatever the response, the focus should be on “saving as many people and as many businesses as possible”.
With world sports largely on hold, Cr Memeti ruled out the council investing in a renewed bid for an A-League soccer team in 2020-’21. Its Team 11 submission failed in 2018.
“The timing is not right. It’s been put on the backburner.”
Cr Memeti was keen for the $50-million-plus Springvale Community Hub project to remain “on time and on budget”. It had been forecast for completion in mid-2020.
He urged residents to follow Government health advice.
“We’ll get through this together. We’re a strong resilient nation – we’re people from all over the globe and we’ll overcome this as well.”
Greater Dandenong corporate services director Mick Jaensch said the council was anticipating revenue losses as a result of the pandemic.
“Council cannot say accurately at this point the magnitude of this impact.”
Over the past week, Greater Dandenong closed down events as well as libraries, aquatic centres, stadiums and customer service centres to stop the spread of the virus.
“Council is currently investigating innovative ways to continue to provide arts and cultural services during this testing time,” Mr Jaensch said.
“(We) will keep the community updated on developments in the coming weeks.”
Councillors are currently in talks over the draft 2020-’21 budget. It is expected to be considered on 27 April and then open to public submissions.
