By Paul Hemsley
Annual cash revenue for the City of Sydney could potentially pay for projects even if a rate freeze is applied, according to a report from RedBridge Grant Samuel.
Commissioned by Sydney Business Chamber, the report Global Sydney: A Five Year Strategy for a Vibrant and Competitive City of Sydney said annual cash revenue over the last eight years far exceeds the amount necessary to efficiently deliver services.
This revenue has grown by over 40 per cent since 2004 to more than $500 million per annum, according to the report.
“The council also has cash and liquid investments of almost $520 million and real estate not used for core services valued at more than $1.5 billion," the report said.
The report also said the council has no borrowings and net assets of $6.7 billion.
“We therefore estimate that the council could spend up to $1 billion on key infrastructure for the city over the next five years and still maintain a AAA credit rating.
“Leveraged with appropriate private sector investment, this would enable a substantial regeneration of strategic sites in the city, bringing in hundreds of millions of dollars in additional annual GDP and significantly improving the quality of life of residents,” the report said.
According to the report, the NSW Government will be required to support the implementation of the transport, infrastructure and development plans, “but funding should not be a major constraint”.
Mayor Clover Moore said it is important to note that once the council’s large infrastructure projects begin, and the cash reserves that have been carefully invested to fund them are used, the investment income will significantly fall.
"We will need to rely on our future rates, property and business revenues to deliver the vital everyday services the community expects,” Ms Moore said.
She said the proposal to freeze rates for four years would therefore “hamper the City's long-term financial sustainability and ability to continue to fund new projects”.
However, the report said easing the rates’ burden will enable businesses to invest in promoting their strengths and residents to spend more within their local communities.
According to Ms Moore, the report suggests the council work closely with the private sector.
“However, we are also already doing that and have close partnerships with a number of private sectors on a number of major projects,” Ms Moore said.
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