The rate capping debate has created a wave of discussion across the country, as no doubt it should...

Is it a good thing or a bad thing? Depends on how we look at it.

After all, we happen to be the resilient lowest tier of government who have had everything thrown at us – from best value, to compulsory competitive tendering, to ratio reporting, and now rate capping.

My grandfather always said that life is simply about managing options and expectations. Simple as it sounds, it's a very sophisticated statement. His statement was about getting maximum mango and banana yield by minimising wages and strategising on fertilisation cycles. And he was a genius at that, using very intuitive methods in his own head.

Life has moved on from good old Grandpa, but the theory is still the same. The world is crying out to plug the infrastructure gap. It's headline news in US, Canada, UK and definitely Australia.

The reality is that there simply ain’t enough money to fix everything that needs fixing.

Sounds very gloomy, right? Doesn't have to be.

So what are the options?...

  • Raise taxes or rates?
  • Print more money?
  • Cut services?
  • Pretend it will all be ok?

None of the above is appealing, let alone having that conversation with our customers (or worse still, the community or our grandkids).

There is a fourth option that I have been professing for two decades; financial optimisation.

It's the science of spending the same amount of money more wisely, and cutting asset consumption progressively over the next decade. It’s been done by scores of local governments, and it works!

It’s about the data and science that allows us to decide which trees to fertilise in which year, and what labour to allocate to which part of the farm, so we end up with the highest fruit production progressively over the next ten years, at the least cost... Grandpa was a bloody genius!

After all, rate capping is another form of direction that says – spend money wisely for the maximum benefit to your community, and if you want more money, show us why and how... And that's exactly what optimisation delivers!

As a fraternity there has never been a better time to show leadership in this space, and embrace optimisation rater then fear rate capping.


Ashay Prabhu

Tel: +61 3 9026 0555
Level 12, 257 Collins Street, Melbourne VIC 3000

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