Analysis of the City of Gold Coast Annual Budget.
The City of Gold Coast's annual budget involves some big dollars but what will it mean for the business community looking to recover from the COVID-19 crisis? The Tom Tate-led council has handed down a total budget for 2020-21 that is a whopping $1.72 billion. That is a big figure, but it is down nearly $10 million from last year.
The City Council is planning to borrow money this year to invest in infrastructure and intends to keep borrowing until June 2025. Total debt is forecast to increase from $615 million in June 2020 to a peak of $825 million in June 2025.
In its budget, capital expenditure (think roads, bridges, pipelines, parks, and community facilities) will cost the city $575 million. Expenditure on infrastructure can have terrific long-term benefits for the local economy. Better roads and better facilities often mean a stronger business community.
The council will also spend $1.06 billion on services to the community and its own operating costs. Of that, $411 million will be spent on employees, up 3.7 per cent from $396 million in 2019-20. It is also spending $1.4 million to replace its website and another $4.9 million on cloud-based IT systems.
The council will also spend $3.7 million for what it calls internal marketing "that contributes to positive city reputation". Much of that will be spent on "Spin Doctors" to run the city's PR and social media activities to tell us what a wonderful job the council and Mr Tate are doing.
Most residential ratepayers will pay the same rates this year as last year. Commercial property owners in the key tourism and business hubs of Surfers Paradise, Broadbeach, Southern Gold Coast and Southport (well, 91% of them) will receive a rate cut because of the removal of the Special Rates levy for these areas. These Special Rates levies previously funded the local area marking groups Surfers Paradise Alliance, Broadbeach Alliance and Connecting Southern Gold Coast, which no longer exist. The Chamber was opposed to these closures and there is no guarantee that the rates savings will be passed onto the tenants.
Other than that, there is not a lot of excitement in the budget for the business community. Given that Regional Development Australia Gold Coast found that 97% of business owners on the Gold Coast had not received any meaningful help from the council during the COVID-19 crisis, the Chamber was hopeful of seeing a splash of cash to help the recovery.
However, the budget reveals the council is reducing its spending on economic development from $59 million to $53 million. Of the $53 million, $35 million will be spent on "Tourism Management and Marketing". It's great that the council has committed to spending $15.5 million, or the same as last year, for Destination Gold Coast to promote the city to tourists. What would have been greater would have the council spending more on tourism marketing to start a marketing blitz to help the city recover. The new events body, Major Events Gold Coast, receives $9.3 million, so it will be interesting to what this group achieves. Study Gold Coast has been allocated $3.2 million to support the education industry and to attract international students.
The remaining $17 million dedicated to economic development is designed to be used to increase business confidence, increase economic growth and help the Gold Coast to have the fastest internet in Australia. Only $1 million is allocated to the internet plan (less than the cost of its own website), while $2.4 million is to be spent on a super yacht berthing facility at Southport Yacht Club in partnership with the State Government.Another $4.3 million has been set aside for an unspecified "targeted stimulus measures" and $3 million has been set aside for "major events, tourism and economic diversification opportunities to be identified". The Chamber is happy to help council officials determine where best to allocate these funds.
So, what does it all mean? Well, given that one of the three pillars of the City's Corporate Plan is that the council wants to create "PROSPERITY built on a strong diverse economy", it's unlikely to achieve its goal of building a more diverse economy any time soon but the budget will be more positive for the city than not for the business community.
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