Yarra City Council is showing welcome signs of coming to grips with the realities of dealing with debt, higher interest rates and increased costs because of energy shortages.
In the council's plan approved last week to manage its $2.3 billion worth of assets, it has flagged the sale of ageing buildings as well a possible reduction of service levels to cover rising costs.
These are sensible contingencies. Revenue from the sale of buildings too costly for the council to maintain could be used to pay down debt, and lessen the amounts paid in interest as cash rates increase. No one wants to see basic services reduced, but the council can certainly put on hold such extravagances as the costly electrification of council buildings to cut reliance on gas.
With the electricity grid under extreme pressure - and likely to remain so - the achievement of putting additional demand on the grid must be highly dubious. Yet the council continues to cling to a belief that this is in the best interests of ratepayers.
Economist Milton Friedman famously declared that policies can only be judged on results, not their intention. This is something Yarra Council must heed. It is a folly, both economically and practically, to continue with this expensive transformation at this time. It achieves nothing outside of costing ratepayers money.
