Councillors voted yesterday to go further into debt rather than cut any programs immediately after Local Government Minister Barbara Perry’s refusal of a 12 per cent business rate increase, coupled with a smaller-than-expected State Financial Assistance Grant, left a $366,000 black hole. The total rate increase for Great Lakes landowners, including the inflationary 3.5 per cent hike, is just under 6 per cent. The minister approved a 2.45 per cent rise in the environmental services rate, but Great Lakes mayor Jan McWilliams said the blocked funds were crucial to the area’s $245 million-a-year tourism industry.

Sacrificing the spending was not an option, she said, which left increasing the deficit as the only alternative.

“It’s awful. We don’t want to go into deficit, but there’s no other choice,” she said.

“We’ll meet on August 19 with senior council staff, and we’ll see what cuts we can make.

“By the first quarterly review I’d like to see a reduction in this deficit, and see it halved by the second quarterly.

“By the 2010-11 budget, I’d like all this deficit to be gone.”

The council will not employ any more staff in the foreseeable future, or fill vacated positions.

“But no staff will be put off,” Cr McWilliams said.

Ms Perry said councils that successfully applied for rate increases made “a strong business case detailing the work the extra revenue would fund” and showed that “their community understood the impact of the rate increase”.

A letter from the Local Government department raised “concerns” about the proposed tourism levy to be funded by the business rate increase, citing an “apparent lack of support among these affected ratepayers”.

“It is…of concern that…the levy would be used to partially offset council’s tourism budget,” the letter read, “rather than provide for additional services.”

“Do [the State government] not realise that funding is going to tourism, to bring new events to town?” Cr McWilliams said.

“Businesses will go out the back door if the tourists don’t come here.”

Acting general manager Ron Hartley slammed the minister’s logic.

“There are a number of independent reports out there about councils’ inability to keep up with maintenance costs.

“If that’s not a business case, I don’t know what is,” he said.

“From an asset management point of view, [the government’s position] is just bad economics.”