Coffs Harbour’s economy is largely stagnant.

Hi Hugh,

I hope you’ll publish this article regarding Council’s operations.

Tried to call you but no answer. Will do so again soon.

Andrew :o)

Since Hugh has offered me the opportunity to present a conservative/libertarian viewpoint on a local issue, I’d like to advance a short argument in favour of reducing the budgets (and therefore staff) of Council’s EDU and similar programs. This would be in line with Cr Cowling’s recent proposal to ensure a balanced annual budget, but I’d like to see it happen across all of Council’s operations as a matter of principle.

Council spends an amazing amount of our money on the conduct of studies, writing of reports and applying for grants before very much at all—if anything—is achieved. Economists term this spending of resources in order to gain an increased share of existing wealth, rather than actually creating wealth, as “rent-seeking.” State and federal governments love redistributing wealth to rent-seekers because it maintains their power base; public servants love it because they are guaranteed a specialised career and increased authority; and Progressives love it because they can fund favoured causes without needing to expend their own personal wealth.

But I argue that rent-seeking is hazardous to our community. At a time when Council already carries a debt load of nearly one-quarter-of-a-billion dollars, we’d surely be better off allocating what money we have left to research and development, improved business practices, and productivity increases rather than to lobbyists.

A 1971 study by William Niskanen found that rent-seeking by bureaucracy actually tends to push up the cost of production of public goods, which in our case means ever-increasing demands for higher rates. Sound familiar? And in a highly regarded doctoral thesis entitled “The economic consequences of the size of government in Australia,” Dr Julie Novak recently found inter alia that an increase in government size by ten percentage points is associated with a lower annual GDP per capita growth rate of between 1.2 and 2.5 percentage points. So reduce the size of local government (presently about 490 staff across nearly 30 different locations) by 50 or so people and we ought to see not only a commensurate reduction in rates, but a reduction in overall debt levels and a corresponding increase in economic growth in the LGA of about two percent per annum. Easy! And just think of what innovation might be free to blossom in a less constrained business environment as well.

I reckon liberals and conservatives could find common ground on this issue. Nobody likes to see anybody overuse their artificial monopoly power to extract excessive fees, charges and other recurrent payments from the rest of society, including productive businesses, so why should our Council continue to do so? Why should Council continue to use its zoning and other regulations to protect incumbent landowners’ property values in the CBD? And why should it discourage the use of cars in the CBD on philosophical grounds, when it knows full well that the retailers and service providers who actually create wealth in that location rely on a car-loving public’s patronage.

Coffs Harbour’s economy is largely stagnant. Our Council is bloated (yet still growing) and geared toward rent-seeking at the expense of everybody else in our community. Surely we can all—owners of productive businesses, employees, populist conservatives and liberal reformers alike—unite to sort out the mess.

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