The latest COVID lockdown is estimated to have cost City of Newcastle around $8.5M, and council is set to ramp up its infrastructure program to reignite the local economy.
The combination of the financial impact of the lockdown and the economic stimulus package is set to reduce council’s operating result from continuing operations to a surplus of just $2.153M.
The impact of COVID-19 on council’s forecast income was felt in areas such as:
- $2.6M reduction in income caused by waste trucks from Sydney being locked out of the Summerhill Waste Management Centre.
- $2M loss of ticket sales from the closure of the Civic Theatre and other City facilities.
- $1M reduction in parking meter revenue.
- $1.3M reduction in parking tickets.
- $600,000 reduction from bookings to the Stockton Holiday Park.
To stimulate the local economy, City of Newcastle will propose at this month’s council meeting to increase this year’s infrastructure program by $14M.
If grants and contributions are not included, then it would be a deficit of $11.635M. The additional infrastructure work would be funded from the City of Newcastle’s cash reserves.
CEO Jeremy Bath said, like many other businesses and organisations, they too had been significantly affected by COVID-19.
“We are fortunate that, despite the impacts of COVID, we have been able to manage these financial setbacks without them threatening the sustainability of the organisation or requiring us to consider other measures such as rate increases or reduced staffing levels,” Bath said.
“Prudent economic management has enabled us to cope with this economic downturn, while our decision to increase our works program to a record $104.7 million will stimulate the local economy, provide enhanced facilities for our community and create new employment opportunities, with every one million dollars we spend generating about 10 new local jobs.
“Importantly, the budget will continue to be fully funded from the City’s cash reserves, which have been built on the back of six years of strong financial management and surpluses.”
Newcastle Lord Mayor Nuatali Nelmes said that despite the significant budget strain, they would still provide targeted responses and support for those in need.
“Council unanimously voted in August to move forward with additional COVID support measures, including rapid response grants to support our vulnerable community members, business training and mentoring programs and economic development and community grants,” Cr Nelmes said.
“We have also boosted our 2021/22 works program by more than $14 million to a record $104.7 million, which will support the local economy and help create new jobs.”
Information source: Media release, City of Newcastle