This was the newspaper report of our views.
I am of course well aware, as Peter is also aware, especially from questions I asked him at the briefing on the draft management plan in Ulladulla on 21 May, that council doesn't budget with lumps of money for fuel, bitumen, etc. Of course there is a program budget.
I was recommending program budgeting and strategic planning to the Coombs Royal Commission into Australian Government in 1974 when such ideas seemed odd.
My questions in Ulladulla also addressed the need for some kind of Zero-Based Budgeting as recently employed in UK local government (and on which I was reporting from the Washington embassy in 1977), rather than simple increment-adjustment budgets. You can't have that sort of thing without coherent performance by elected councillors (not grabbing and distorting priorities), with capacity for incorporating community interests and staff work to build good programs.
... Enough of that, I just wanted to make clear that I do not have a child's view of the budget.
The real issue is whether energy and fuel prices will be limited to 4% as the budget proposes. However counted, fuel costs run through the budget. I sought on 28 May, but to the best of my knowledge did not get, some idea of the size of the fuel bill in the budget overall. When fuel is an element in program items, if prices rise, the project moves right in your action plan - out to later months or years... unless you have some more sophisticated way of dealing with energy and fuel price rises. Or do we simply dip into reserves?
Ross Garnaut is going to release a draft Climate Change report on 30 June and a final report on 30 September. These are likely to herald significant increases in energy costs. Regardless of the fact that this council has declared in its wisdom that Climate Change is rubbish, Garnaut will happen. The increasing price of oil is currently buffered by the fall of the US dollar. This will continue at least for some time, with wider messy global economic consequence if other governments move to shed the US dollar. But the idea of limiting to 4% would seem to most families overly optimistic and some preparation for budget juggles seems sensible...
The macro-economic situation is likely to defeat the Federal Government and Reserve Bank, with money (and investment) flooding into Australia from China (for which buying RioTinto and BHP-Billiton is easy in money terms if hard politically), as a result of the resources booms north and west... While southeastern Australia is in a sluggish economic situation, more comparable to the weak economy traps of the United States... the problem of a level playing field in our own country. The squeeze will stay on, or increase. Food and fuel harder for all. We are a potato chip on the edge of politico-economic seas. As of right now, the Iraq war has cost the United States enough money to run the Shoalhaven City Council (on its quarter billion budget) for more than 2000 years.
It is useful to read George Soros's global perspective. Do not expect recovery or more income to local government soon, do expect energy and fuel prices to rise by more than 4%. We have rates rises locked in; the number of people with difficulty paying their bills and paying their rates may increase. I am not alarmist. I just want to talk about these elephants in the room, not pretend they are not here.
