There is a lot of talk in the national newspapers and TV about the two-speed economy: the mining industry that is doing well and the rest of us, doing not so well.

Here on the Gold Coast we seem to have a three-speed economy: the mining industry, the Council and the rest of us. Seems like while the mining industry boom along in other regions of our state and our Nation, the only industry doing well on the Gold Coast is the Council.

I’m in a local business and like a lot of local businesses we have had to tighten our belts and reign in spending to survive the downturn in the economy generally and the tourism industry specifically. Seems that tightening of belts requirement has not reached Gold Coast City Council.

The most interesting document obtained the long-term financial outlook. It’s on my website now for anyone to download. For transparency sake, I think that all the council meeting agendas be online long before the meetings are scheduled and the minutes should be online in the following week of the meeting for all interested residents to see. Ultimately I would like to see council meetings streamed to the internet so that a cheap but permanent copy is retained about what was said by whom. I have witnessed myself things said during Council meetings being different to what is presented to the media later on.

The long-term financial outlook Council is bleak.

We will be in deficit in 2012-13 to the tune of $26 million. 2013-14 sees that add another $40 million. $29 million for 2014-15 and $13 million for 2015-16. That is over $100 million of deficits for the next term of Council locked in for whomever wins the next Council elections. This is not counting the $50 householder pork barreling that Councillors pushed through before the next election. There is no money for this $50 cheque to go to every household – it’s just borrowed money. We as a city are borrowing millions just to pay ourselves $50 each!

These deficits also point to the fact that Council is locking itself into general rate rises of 5.5% from 2013 onwards and a fee and charges increase of 5% per annum compounding. AllConnex disbandment is being lined up to get all the blame but I feel it is Council itself that should be taking a good hard look at itself. It hasn’t made the cuts it should have as the economy down turns just like every other business had to on the Gold Coast to survive.

The figures presented are sometimes contradictory and other figures are downright disturbing. For example on page one of the long-term financial plan the discussion details how the Council’s budget will be in deficit for the next four years at least. Yet on the very next page one of the assumptions is that “The model assumes the budget will produce an annual surplus of $15m”. We have recently seen announcements of budget surpluses but as far as I can see we have been borrowing for building assets that won’t provide a return. That’s deficit spending in my book.

Another inconsistency I discovered was the money that the city has borrowed for projects that are no longer going ahead. According to the Mayor’s speech at the Institute of Business Leader’s budget prelaunch breakfast, Council has borrowed a lot of money it doesn’t need right at the moment. But rather than bring down the debt we at the breakfast were told that officers report that the city is making more money from interest revenue. I found that strange at the breakfast and yep – the document shows how this is not the case. We receive around 5.5% interest revenue and pay 7.0%pa on borrowings.

In the last budget in 2008 our city had borrowings of around $265 million. In 2012 that will top at $850 million and be almost $1 billion dollars of debt by 2015! There is a lot of talk about Net Debt however our city seems to be borrowing or drawing down against our ‘home loan’ and then just putting that money in the bank.

The State Government financial benchmarks are all being missed now with this Council. Working Capital Ratio should be between 1 and 4. It will be 4.3 in 2011-12. The Operating Surplus Ratio should be no more than 10%. It will break that barrier in 2017. Our net financial liabilities ratio should be between 0% – 60%. Well next year we break that barrier for the first time and it will read 95% by 2014-15. The interest coverage ratio should be between 0% – 5%, for the next few years it will be between 7% and 8%. The Asset sustainability ratio shouldn’t be less than 90% according to the State Government. This is 66% next year and is falling rapidly to 39% in 2014-15.

Yep. These are highly technical accounting terms and ratios but in business they are the indicators of a healthy or unhealthy business. If Council was a traded stock the rating would be “SELL”! As it says in the report in black and white “Council does not meet the benchmark for these ratios until 2020″ – almost 10 years from now!

Seems Council has gambled on AllConnex bring home the bacon, reinvesting the compensation from the State Government for all the bulk water and distribution assets we gave up and reinvested them into a distribution business we already owned but now we don’t control.

The most damning line in the report is that “Council is raising sufficient operating revenue to meet operating expenses”. Even the way this line is written indicates how the Council wants Councillors to respond – to raise rates. Never is there any suggestion that drastic cuts need to be made nor is there any line that the council itself needs to reform.

Costs are out of control and so is debt creeping up to unsustainable levels. It won’t be long before we are a basket case like the Queensland State Government who is now suffering under an interest bill of $100 million each and every week!

To get out of this mess we need to reform council, cut the 8 directorates to 5, refocus them on core Council responsibilities and defer many of the ‘make work’ projects, reports, committees, task forces and unproductive activities the this Council seems to be doing these days. Tough minded business people need to take over in Council to turn this ship around otherwise we will be a failed city by 2016.

The headline said it all: “Junket Junkies”.

The article was, of course, all about Council’s annual travel expenditure topping the magic half million dollar mark while the rest of the Gold Coast struggles.

It was, of course, the annual beat up on Council over the extent of councillor and council officer interstate and overseas trips. It has been going on since Noah was a boy but with our city’s economic problems it hardly seem right to be jetting off here, there and everywhere.

Those councillors who do fly always justify it with the ‘economic benefits that these trips bring to the city’ line.

If that was true, then we wouldn’t be in the economic state we are now, would we?

I am all for trade missions to far off places being facilitated and lead by a mayor or deputy mayor.

In Asian countries especially, a mayor or deputy mayor really does open doors, sometimes much more than a member of the State Government can. Asian culture seems to reverie the mayoral robes.

But, the World Veteran’s Table Tennis Championships and the International Federation of Library Associations junkets took my breath away.

These were attended by third level management bureaucrats inside Council. What was gained from these?

We also seemed to be burning a lot of carbon to fly green leaning Cr Peter Young to climate change conferences around the world in the past few years.

Years ago, when councillors weren’t paid much if anything at all, the only ‘perk’, if you like to call it that, was an annual trip away. But: councils got larger, the trips got further away and more lavish, and in the late 1970’s and 1980’s, the Council overseas ’study tours’ really took off.

Problem for them now is that Councillors and Mayors get a decent, full time wage, but the trips away haven’t stopped. Combine that with a massive down turn in the economy and a relentless march of rate rise after rate rise and overseas trips have become, in the minds of the public, a major negative. And, rightly so.

So here is my position.

There is nothing more accountable then having to spend your own money on something. So I personally won’t be going on any ratepayer funded trips overseas.

If a business group needs a mayor to open doors in Asia then I’ll personally share the costs with the business group to go. The mayoral salary is more than enough to handle a few trade missions overseas every year.

If a councillor wants to educate themselves on some aspect of local government that can only be achieved by visiting some overseas destination then they can pay their own way to further their ’self education’.

Councillors get paid enough for that as well.

Those two simple policy changes would make an enormous difference to the decision to fly or not to fly I suspect.

But it can’t stop there. While it is a fun sport to bash councillors for travel expenditure it must be noted that the overwhelming majority of the spending has been by officers.

I intend to put tougher guidelines in place for officer level overseas travel, mostly limiting overseas travel to our economic development team.

I do want to hear first-hand the justifications, however I think we will need to sort out a stricter regime of accountability for success for such travel, something that is lacking currently.

For the rest of council I’ll be encouraging them to do what I do for international business and that is to use a lot more video conferencing and Skype. It’s free, it saves time, especially travel time and it works well!

Then I intend to take some of the money saved and start bringing those business CEO’s and investors here to the see our Gold Coast. That is the best way to attract the job creation investment that this city needs! CEO’s and investors need to experience a place long before they will be prepared to invest here.

You can play all the slick videos and PowerPoint presentations you like while on an overseas trade mission or conference. But, until you visit a place you won’t get a proper feel for it.

I have never met a business person willing to invest geographically based on a tourism video. So instead of Councillors flying there, let’s fly the key decision makers here instead.

..it’s time to have your say!

As part of my program to find out the issues across the city I have committed to a series of meetings with industry groups. This will cover everyone from the arts sector, tourism, retail, restaurateurs, hotels, tradesmen, builders, lawyers, government employees and so on.

This program, which is in addition to door knocking and attending community group meetings, provides a personal and intimate way to get your feedback. After all part of the problem with the current Council is that they have lost touch with the people they are charged to serve. We only need to see the size of rate rises, 24 percent during the toughest economic times we have ever experienced, to understand that accountability has been lost.

The latest gathering I attended was a mixture of people from the marine industry, law, public relations, retail centre owners and builders. Their feedback and concerns they raised were invaluable. It is my intention to take this personal approach and speak to as many residents as possible across the Gold Coast.

People need to know their Mayor and they need to know that their leaders are listening, not just trying to market themselves as is the case with current councillors who wish to be Mayor.

The recent decision to split from Allconnex is an interesting decision on the part of Council but what is more disturbing is the approach by Allconnex at the last minute to try and divert the split by promising to control increases. What a shift in attitude from a few months ago when their CEO was telling us that we undervalued water. The trick is now to find the necessary savings and unfortunately the current councillors who wish to be Mayor have proven they can’t control the cost of the bureaucracy. Cr Eddy Sarroff has even complained that Council Officers won’t answer his questions. This is a clear demonstration that there is no leadership and even worse – no ability to inspire trust from the staff or their fellow councillors.

We have seen in recent weeks a series of cynical political back flips in an attempt to undo the damage done in the last four years. Unfortunately that is not leadership and it certainly isn’t vision.

People who pushed through massive fees and charges on the business sector are now trying to claim they are the saviours of the city. There are thousands of people on the Gold Coast who have lost their jobs in construction and other industry. It is time for change. We need to set a new direction that will get our city back on track.

A clear course for the future and a leader with the vision, leadership and experience to create real and positive change is the key to finding savings. To pull numbers out of the air to impress voters when there is no understanding of what is required to be funded by legislation and what isn’t is as irresponsible as the Chair of Finance voting to purchase Tipplers and waste $14,000,000 of our rates.

As we’ve now seen first-hand, a Mayor that hasn’t served time as a councillor lacks the experience and ability to lead our city. We certainly can’t afford a leader that has been part of a Council that has resided over massive rate rises in the last four years.

It is my aim to control the bureaucracy, stop the waste, stop the rates rip off and get value for money from our rates.

As the only candidate with the experience and the track record of delivering sound financial management, I know how to find the savings within the current budget without destroying service levels and causing financial harm in the long term.

The community plan that I am developing to reconnect Council with residents is critical to restore our faith and confidence and to that end I am unashamedly looking at other cities and their successful programs to understand other options. That is why my personal approach of engaging with people one-on-one and in small groups is vital. If you have a group that you would like me to meet and discuss your issues, please let me know or if you just wish to meet one-on-one to provide feedback – you are more than welcome to contact me on admin@davidpower4mayor.com.

One promise I will make to the people of the Gold Coast is that this type of consultation will continue after the election as it did during my time a Divisional Councillor. We need to make sure that the power is handed back to the people.

The Gold Coast City Council Budget for 2011-12 released last month showed that our city’s gross debt levels rising to over a billion dollars, if you include AllConnex, by 2015. But Gold Coasters shouldn’t feel especially worried, not when we compare ourselves to the overall debt position of our State of Queensland. That’s what people should really be worried about!

The Queensland Government through the Queensland Treasury Corporation (QTC) have announced that they plan to borrow just over $22 billion in the 2012 financial year. That’s up from $15 billion in 2011. By the end of 2012 Queensland will have a debt of $69 billion.

By 2014 our state debt level will likely top almost $90 billion. That’s a billion dollars in debt for each of the state’s 89 parliamentary seats. On the Gold Coast we have 10 state Seats including Albert, Broadwater, Burleigh, Coomera, Currumbin, Gaven, Mermaid Beach, Mudgeeraba, Southport and Surfers Paradise. That means our collective share of the state debt is over $10 billion out of the state’s $90 billion projected debt.

So in simple terms, look around the area in which you live – the state seat in which you reside and ask yourself: “do we have a billion dollars worth of new infrastructure here?”. The answer will be “no”, of course.

Why is this important? Well we as a state will have to pay this debt back at some stage in the future. We can’t just keep borrowing more and more money. However we don’t look like paying much back anytime soon as it is forecast that our state will remain in operating deficit until 2015.

It is a particular problem for the Gold Coast City Council – as well as its borrowing ability and the interest rate we pay is tied to the State of Queensland. Because we don’t have our own ‘City of Gold Coast Act’ like Brisbane does, we must go cap in hand and raise any borrowings through the Queensland Treasury boffins in Brisbane. As our State’s credit rating dropped from AAA to AA+ so did our city’s credit rating effectively. This won’t change for the next five years unless new state managers get into George Street.

If the polls are right then we are going to get a change of Government sometime this year or early next year. The problem of this large state debt is then going to fall into the hands of the LNP leadership team of Campbell Newman and his able Shadow Treasurer Tim Nichols. They are going to have a tough time and will have to make some very tough decisions. Unless we have a strong voice with the incoming State Government there is a danger that the Gold Coast may be overlooked at the state level.

It’s no secret that I am a conservative at heart and always will be. While I am running as an independent for Mayor, people should be in no doubt which way I lean and that I am a long time member of the LNP. Of course any Mayor needs to be able to work both sides of politics, whoever is in power in Brisbane, so as to get the best deal for our city. There is no doubt it is an advantage if you come from the same side of politics however.

It can be done as long as you keep the petty politics at bay and always be fighting for the betterment of your home city. Great example of this approach include Campbell Newman and Paul Pisasale. Long term Brisbane LNP Mayor Campbell Newman got a lot out of the Labor State Government despite his LNP affiliation. Similarly I suspect that Paul Pisasale, an ALP man, will hardly miss a beat in getting the best deal for Ipswich if, as predicted by the polls, the LNP sweep to Government at the state levels within the next nine months.

The current Council has not set any records for its ability have itself ‘heard’ at the State Government level. The AllConnex debacle and the middle of the night stealth rip-off of our local bulk water capture, storage and distribution assets in return for a water retailer that we already effectively owned is evidence enough of those state level lobbying failures. We are going to need a strong voice fighting for our city the State Government that is looking to cut its own operating budget. Without it we could lose out as the realities of this State’s dismal finances start coming home to roost.

It’s that time of year again. The one you either love or loathe, TAX TIME!

And let’s face it the only reason you love it is because you get a big fat refund cheque or loathe it because your get the mother of all tax bills. Either/or.

And see, for the last, oh ten or so years, this has been my day job. Doing tax returns. Riveting I know. But the thing is, it is often not about the actual work you are doing, but the people you are working with. I’m sure even if you were doing the best job in the world, i.e. Bradley Coopers’ Personal Assistant, you would still detest going into work each day if everyone around you was being an arsehole. While granted, the lovely ladies I work with do not resemble Bradley Cooper (probably for the best), they are wonderful and funny and I love spending my day shooting the shit with them.

So back to tax, here are a few pointers from someone who has probably seen it all. A heads-up as it were.

Do not try and pass off your new pec implants as a medical expense. It wasn’t a ripped muscle due to excessive exercise. I can read the terminology on an invoice.

No, actually, I can’t work out what you will be getting as a refund when you haven’t given me all the information because I seem to have failed to activate my crystal ball. Give me a sec.

Do not give me all of your shit in manual and written form and then claim to use your computer 100% for work. I am not mentally challenged.

No. Your alcohol is not deductible. OK, once upon a time, I believe in the eighties, you could get away with a fair bit of stuff, boozy lunches being one of them. Now, no. OK. Just no. And hey, I’m as disappointed with this as you are.

If you don’t actually own a vehicle, please don’t try and tell me you take your heavy tools to and from work each day. I know you can’t and you don’t. Again, I may not look like it, but I actually possess a functioning brain.

No. I do not need to see pictures of your colonoscopy. Not necessary. A simple invoice will suffice.

Ditto love letters left inside your copious amounts of irrelevant paper work. Especially the ones that delve a little deeper into your personal lives than I necessarily need to know about.

Yes, yes you do have to tell me about the income you received from Dazza when you were labouring for him for six months. Especially when you tell me about it fuckstick. You have no idea how many times people say to me “Oh I got cash for about six months, but no one needs to know about that do they?” Well hey; no one would have until you opened your massive mouth. I prepare your tax return, I am not a priest.

It’s really nice talking to you but it is not necessary to hand me EVERY INDIVIDUAL PIECE OF INFORMATION. Believe it or not, I know what I’m looking at and get this; I’m not going to steal it. Hand it over.

OK. So there are a few tips. Quite disturbing that I already have such passive aggressive thoughts and tax season is not even a week old.

Any questions? I’ll do my best to answer them. Remember they are not stupid questions. Just ones I’ll use in next year’s Tax Time Blog post.

We are not competitive as a city. We don’t encourage business to move here and we certainly don’t encourage start-ups to start up here. It’s our basic costs, regulations, laws, planning scheme and fees that is killing our economy and that’s what is killing us as a city.

I won’t bang on about how Council’s fees are too high or at least much higher than our city level competitors like Melbourne or Sydney or even much closer to home in Ipswich or Brisbane. They are high. Everybody in the property industry and business community knows they are high so this isn’t new or news. I have come across some examples of the competiveness problems the way some of our Council’s fees are structured and implemented that are causing even greater problems.

At a breakfast function I attended last week the discussion revolved around PIP and other infrastructure charges still being levied by Council even in these hearse economic times. I used the example of my little extension of adding a coffee cart to the front of the Islander Hotel. The coffee cart extension has triggered council to send me an infrastructure bill of over $65,000! Numerous examples then poured forth around the table of similar outrageous bills with the general consensus being that in today’s environment it usually means the feasibility of projects are tested.

One bug bear that has hit property owners since the start of the GFC was the Council’s requirement that all their PIP and other charges be levied on the absolute maximum use that a property could sustain, not on what was actually being proposed and applied for. So if a property in Surfers Paradise could sustain a 50 storey building but you were, because of market conditions and other Council constraints, only building a 25 storey building on the property, you still had to pay Council as if your were building the 50 storey building! You were paying for infrastructure that was not going to be used.

Now before you hop on to the fact that only developers lose out on such fees, remember that those council fees (taxes) get wrapped up into inflating the costs of the apartments people buy, the cost of office or retail space and ultimately in the prices for the good and services those businesses sell to all residents. It hurts us all and it is contributing to the starving of our economy.

Now Council has introduced early last year a temporary planning instrument that allowed the fees and charges to be calculated on what was actually proposed to be built not. It took a long time and a lot of lobbying to get this through. A smart thing to do albeit a little too slow and therefore a little too late. But here is the kicker. Gold Coast Water and its subsequent love child AllConnex isn’t subject to the same sensible relaxation! Where is the consistency?

Another inconsistency is with storm water retention. When a property owner plans a development he or she has to engage engineers to design a system of ensuring that the new project doesn’t generate any downstream storm water impacts to adjoining properties. Sensible policy. Just because your neighboring property has hard surfaced areas with pavers or concrete there is a chance that this stops the rain from being absorbed into the ground and instead runs off to next door potentially causing water problems.

So where is the inconsistency? Council still charges the applicant for downstream storm water infrastructure! If the approved project compiles with the council planning laws and has no impact downstream then why should any payment be required to build storm water infrastructure downstream that’s not needed nor actually ever built? Who’s pocket does this money grab eventually come from- the poor home buyers having to pay much more for a house and land package on the Gold Coast as compared to the exact same block of land and house in Melbourne.

There is no wonder jobs are scarce, the economy wobbling and our future uncertain here on the Goldie. We have killed our economic sustainability with these taxes, unfairly applied to both business and residents alike. We have got to get this city back to being part of the low tax approach that made Queensland the success it was last century if we are to prosper well into this century.

When they say there’s nothing more certain than death and taxes, I think they had our Council in mind.

I’ve had quite a few calls from punters cheesed off that their lower property valuation notices from the State Government aren’t likely to translate into lower rates come the June Council budget. They rightly can’t understand why rates fire up when values rise and don’t fall in turn when they sink.

Some areas will find their properties worth 30% less yet will still receives higher rates bills. That’s because our Council is too lazy to cut its cloth to fit the hard times we’re facing. The cost of doing everything they want to do keeps going up, regardless of how much our properties are worth.

Let’s hope Eddy Sarroff and the crew fight hard to cut rates rises back to the bone as promised.