City economic development agency sees red over proposed budget cut
Adelaide City Council’s economic development agency has hit back at a proposal to slash its funding in the upcoming budget, saying it was “incredibly disappointed” in a savings plan which also targeted a scheme to reduce homelessness.
At last night’s meeting, the council’s City Finance and Governance Committee was presented with a list of areas in the upcoming budget that could be cut to fund a rate increase of 5.9 per cent for next financial year, instead of the 6.9 per cent first recommended.
In April, councillors asked staff to find $3.2 million that could be shaved off the existing budget, with $1.8m of the savings to help fund upgrades to park lands buildings and the rest will support a lower rate increase.
The council specifically asked for cuts to be found in its external grant, sponsorship and strategic partnerships programs.
As a result, the council’s Adelaide Economic Development Agency (AEDA) was targeted for cuts worth approximately $770,000.
AEDA is a council subsidiary allocated about four per cent of the total budget, with the agency overseeing commercial events and sponsorship programs and main street development grants.
AEDA Chair Nikki Govan said although the board understood the council’s budget issues, it was unhappy about the proposed cut.
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“I think it’s fair to say that our board is incredibly disappointed in where the business plan and budget for next financial year is heading,” Govan told last night’s meeting.
“We feel that this is a direct take from our ability to achieve and deliver on the charter for which we were formed, and that is to drive economic growth in the city.”
Govan said AEDA was also “incredibly concerned” that strategic partners, events and festivals with multi-year agreements could be impacted by funding cuts.
Acting council CEO Michael Sedgman said they “shared the pain across the budget lines” to find an equitable distribution for the proposed savings.
The identified savings list accounted for pre-committed funding and did not indicate that ongoing agreements with festivals and events would be cut, with Lord Mayor Jane Lomax-Smith saying the council would not renege on ongoing commitments.
Councillor Henry Davis questioned whether AEDA was fulfilling its role given CBD commercial vacancy rates.
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Property Council data released earlier this year showed 19.3 per cent of Adelaide CBD offices are vacant – the highest vacancy rate in the nation.
“My view is that it is really your job to make us lots of money,” Davis said.
“My concern is that you’re not doing a good enough job, really.
“I’m not saying that to attack you, but I’m saying that from what I’m seeing is that to really sustain the city in the future by increasing our rate income significantly because you’re the main driver for increasing that rate income.”
The Adelaide Zero Project is also targeted for a potential $79,000 funding cut.
The Adelaide Zero Project aims to end rough sleeping homelessness in the inner city by 2025.
The council said it would have to discuss the potential impact to services with its partners in the South Australian Alliance to End Homelessness.
But Lomax-Smith said she would prefer not to inflict the “ghastly” budget cut on the Adelaide Zero Project and also did not support cutting $256,000 from the council’s Heritage Incentive Scheme and $500,000 from AEDA commercial events and sponsorships.
Councillor Carmel Noon said the list of proposed cuts was a “reality check” and that the city could not do without some of the services in the firing line.
The committee decided not to recommend the suggested budget cuts be approved, with new areas for possible savings to be identified.
