Editor's Comments: The following is Cairns Regional Council Mayor Val Schier's budget speech in its entirety. Granted, it is a long read, however as residents (and prospective residents for all of you visitors out there) of the region then we think you deserve to read an unabbreviated version so you can form your own conclusions.

As always, The Newsport welcomes your comments - and I'm sure our councillors, who we know are avid readers, do deep down as well.

 

Cairns Regional Council has faced unprecedented economic circumstances over the last three years. In our first year, we were hit with the global financial crisis and resulting economic downturn, a slowdown in our tourism, retail and constructions sectors, natural disasters both here and abroad, the high Australian dollar and high unemployment. It’s not an understatement to say we have faced some of the toughest financial circumstances seen in 125 years of local government in this region.

This Council has not taken these challenges lying down. Over the past two years, Council has deployed a large capital works program to create jobs and attempt to stimulate the economy through the construction industry. Projects like the massive upgrade of our sewage treatment plants, Cairns International Tennis Centre, Botanic Gardens Visitors Centre and the redeveloped Sugarworld Waterpark have put jobs into our community and are important pieces of infrastructure that will last well into our future. This Council inherited a large backlog of infrastructure projects that were funded but had been carried over from previous years. That backlog is now gone with many of the projects being completed by the private sector creating yet more jobs.

We have started to see some signs of recovery in the regional economy, however families and small businesses are still doing it tough. As such, we have made the decision this year to significantly reduce our expenditure and attempt to keep our rates and charges as low as possible. We are facing more increases in the costs of things like electricity and building materials that have made this an even more difficult process.  

Nevertheless, our overall rate increase this year has been kept to 3.4% which we believe will be among the lowest rate rises in the State. This figure includes our water and wastewater charges which makes the comparison with other councils, especially those in South East Queensland, even more favourable.

In tandem with our cost cutting and efficiency gains, Council has also taken a long term approach to economic recovery through our commitment to economic development in the region. Two years ago we established our first ever economic development function within Council as we recognised the need for local government to play an active role in growing and diversifying the local economy. It has not taken long for the benefits of having an internal economic development team to show with the establishment of the tropical innovation awards, successful hosting of a number of investment delegations and close to half a million dollars in economic diversification funding granted to business and industry groups.

We have also initiated two highly successful programs to stimulate the economy – our events strategy and the infrastructure charges discount program. Our events strategy has seen Council provide support to attract events such as the Cairns Airport Adventure Festival and Challenge Cairns and to grow local events such as the Ukulele Festival, Port Douglas Carnivale and Reggaetown into nationally and internationally significant events. All of these events will be significant long term contributors to the local economy and will help to sustain the tourism industry through tough times.

Our four million dollar infrastructure charges discount initiative has received widespread acclaim throughout the community for partnering with the development and construction industry to maintain jobs. As the thirty-two successful projects begin construction, we will assess the economic impacts of the scheme and determine whether another round of discounts is required.  

Despite our best efforts and those of our State and Federal counterparts, the Cairns economy has not yet recovered. We are still facing very high unemployment and although anecdotal reports suggest a better tourism season than last year, a high Australian dollar, the perception that Cyclone Yasi and the floods down South closed us for business and the earthquake in Japan have slowed the recovery of visitor numbers. Our business community is still doing it tough and families are dealing with significant cost of living pressures. Our budget this year seeks to deal with these pressures through its three pillars, being robust, responsible and resilient.  

Robust: in our approach to the way we do business, cutting costs, finding efficiencies and doing more with less.

Responsible: in our fiscal policies – striking the balance between absorbing increased costs and delivering high quality services.

Resilient: gained through planning for the future, diversifying our economy and supporting job creation in our region.

We have worked very hard to devise a robust budget – one that reflects the economic situation in our community. This year, our third year of downturn, it was more important than ever that Council absorb as much of the economic pain from the community as possible. We have already seen a number of businesses, large and small, that have not survived the tough economic circumstances. Not to mention the large number of families we know who are finding it increasingly difficult to make ends meet. We have achieved unprecedented efficiency gains over the past two years, thanks to the hard work of our staff. This year, we hoped we would have a reprieve however the economic circumstances mean that we need to continue cutting our costs, finding better ways of doing business and getting more for less – just like families in our community are. Through our robust approach we have found almost $20 million in savings, cost cuts and efficiencies within Council for the next year.

We have ensured that every aspect of our operations has been pared back as far as possible without compromising our levels of service. This has not been an easy process for officers, and it will not be an easy year trying to deliver our high levels of service with less money. There are no bells and whistles in this budget, just a focus on delivering our key services - mowing lawns, keeping our parks and gardens looking their best, maintaining our roads and delivering our community programs. Our robust approach has the sole aim of insulating ratepayers from our increasing costs –the local government cost index has gone up by 7.5% this year, which is way above the consumer price index of 3.6%.

This is a responsible budget with a focus on both relieving the pressure on our community, and ensuring we are in a strong position to build the infrastructure we will need when we re-enter a phase of growth. Our capital works budget has grown to over $150 million but this year, the majority of this money will be used to maintain, repair and upgrade our existing infrastructure. More than six million dollars will be spent on our road resealing and rehabilitation programs, half a million to upgrade public toilets in the region and over four million to upgrade sporting facilities. All of these projects will be completed in a budget that has allowed no increases in Council’s materials and services costs. Our officers are constantly reviewing work practices and improving how we do business so that we can deliver our programs whilst making these savings.  

Our fiscal responsibility goes much further than our internal operations. We are mindful of the cost of living pressures that we’re all facing. Everything from food to electricity and petrol has gone up in price over the last year and although this effects Council’s budget we know that families are hurting. For this financial year, Council has decided to run at an operating deficit of $4.8 million. We have a clear pathway to return Council to surplus within three years and this small deficit, which represents only 1.6% of our operating budget, has given us the ability to absorb a significant proportion of the 7.5% LGAQ cost index increases. We will not be increasing our staff numbers in the next twelve months and have factored in only minor increases for operating expenditure. These measures all help to shield ratepayers from the costs that we are facing and are all part of our financial responsibility to the community. Our rigorous budgeting process means we are able deliver low rate rises but maintain strong performance ratings in the local government sustainability indicators. This strong financial position will enable us to begin a program of new and upgraded key infrastructure for the region when the economy returns to strong levels of growth.

Resilience is the key to the future of this region and this budget will continue to build on the foundations this Council has put in place to diversify our economy and insulate ourselves from global economic pressures. We are committed to being an active partner within the business community to grow, diversify and build resilience. This budget continues our commitment to economic development, innovation, tourism growth and diversification. Our Tropical Innovation Awards have put this region on the map as a hub of innovative ideas and creativity. Our commitment to a resilient economy will ensure that we grow this event into an internationally recognised incubator for tropical expertise that will result in the commercialisation of local inventions.
 
We are also engaging in a wide range of planning exercises to ensure that when our community and economy begin to grow again, we are prepared with the infrastructure to service our needs. Our Community Plan will be completed this financial year, which will articulate the vision for our community for the next decade.

We are well under way with a new town planning scheme that will enable significant population growth to be absorbed into our community. The detailed planning for the Cairns Entertainment Precinct and Cairns City Centre Masterplans will be finalised in the coming year, with works set to begin on the implementation of both projects. The Port Douglas Waterfront and Daintree Gateway Masterplans will also continue this year and we will be making representations to the State and Federal Governments to assist with funding these key projects. Our highly successful Events Strategy will continue to be rolled out on the back of the successful Cairns Airport Adventure Festival and Challenge Cairns this year. The events strategy is a great example of the benefits of good planning and taking a strategic view of how we leverage our limited funds to gain the maximum economic benefit.

A key planning document that will be delivered by this Council in the coming year is the Cairns Economic Development Strategy. We are the first Council in the region to have an in house economic development team and this will be the first strategic document on the future of the Cairns economy. Advance Cairns is also developing a Regional Economic Development Plan for the wider Far Northern Region that will go hand in hand with our work. There has been much talk over the years about diversifying the Cairns economy without significant action. Without a strategy to guide how we focus our economic development energies, we have been unable to achieve the level of diversification required to ride out this economic downturn. It is my belief that with an evidence based strategy guiding our decision making, we will be able to leverage our economic development funds to attract the kind of businesses, industries and investment that we need to have a resilient and diverse economy.

This Council has been faced with the toughest set of economic circumstances in the 125 year history of local government in Cairns. Our region has been hit hard by the global financial crisis and our road to recovery appears to be longer and slower than the rest of Australia.

This Council has taken unprecedented steps to kick start the economic recovery. We have outsourced work into local businesses, delivered cash stimulus through our infrastructure charges discounts, and provided hundreds of thousands of dollars in economic diversification and tourism development funding.

This year, as we face our third year of economic downturn, high unemployment and slow construction and tourism industries, we are delivering a back to basics budget focused on insulating our community from the increasing cost of living. We are beginning to see signs of recovery in the economy and given this fragile environment, our decision to absorb cost increases will help our businesses and families to see out what we hope is the tail end of the economic downturn. In the meantime, Council will be planning for a revitalisation of Cairns both in terms of infrastructure and the economy. As the downturn subsides, we will have plans for new social infrastructure from Babinda to the Daintree and a roadmap for an innovative and diverse regional economy.