Hands up all of those people who want their goods and services cheaper? It is an easy question to answer, and one that the majority of people will easily answer in the affirmative. Now keep up your hand if you are happy to have your quality of product or level of service reduced with a decrease in price. Now it starts to become trickier – how much will the quality reduce for a certain corresponding reduction in price? Will a 20 per cent price reduction equate to a 50 per cent reduction in service? The scenarios are endless and there is no easy answer.

The modern competitiveness of society and ability to check pricing on a global scale has demanded that organisations become more ‘efficient’ and ‘cut the fat’ to deliver the absolute best value for money for a client. There are many times when I see such a focus on price that the service suffers beyond what is acceptable.

Take a simple example of our streetlights. Councils across the State usually own the streetlights in their city or town. They have typically been constructed by the Council or developers. Councils rarely have the expertise to maintain streetlights so they engage a service provider who is paid for the use of the electricity in addition to paying for the ongoing maintenance of the streetlights.

Not so long ago, electricity providers employed people to drive the streets of a city or town and report back faulty or damaged streetlights. Obviously they had to do this at night and they would work their way through an area and then come back and start again. Streetlights were fixed relatively quickly with this inspection regime.

Electricity prices have been rising well above CPI in recent years and electricity providers are under pressure to reduce their prices. In trying to reduce expenses, one role that has fallen by the wayside has been that of ‘Streetlight Inspector’. In Dubbo’s example, Essential Energy is the electricity provider and they recommend our residents call 13 20 80 or visit www.essentialenergy.com.au/streetlight if they notice one of our 4,988 streetlights is non-operational. It is a change that has only happened over the past five years or so, but one that has seen a dramatic change in policy. Self-reporting saves money but reduces the level of service. Is this acceptable? What will occur next? I know there are people employed by electricity providers to inspect the condition of power poles. Is this role the next to go? Will electricity providers wait until power poles fall over and then wait for the public to report them? Does Council decide to stop wasting money on emptying all the bins in the main street and wait until someone from the public reports an overflowing bin? Do supermarkets stop filling their shelves and wait until a shopper complains about an empty stock line? There are many roles in our society where an employee inspects the condition of an item and then takes steps to rectify what they inspect.

Hopefully you see my point; the idea of finding cost savings is sensible and should be on the agenda of all Councils and organisations – but cutting costs always needs to be balanced against what is an acceptable level of drop in quality.

There is a brilliant 100-word quote from John Ruskin. He lived from 1819 to 1900 but understood the value equation. I won’t give you the full quote (I am sure Mr Google will deliver you the full quote if you want it), but one short segment of the quote hits home with me: “The common law of business balance prohibits paying a little and getting a lot. It can’t be done.”

The next time someone asks if you would like a drop in price, the answer should not be an automatic yes. The question should be followed by another question. At what expense? What else is going to suffer? Only when you know all of these answers should you answer the question. With a new government in power at the Federal level and a relatively new government in our State, both are trying to remove some red from the budget bottom line. Keep in mind the cost and service delivery equation when you hear about various cuts to costs.

So… now tell me if you want Council rates to go down at mayor@dubbo.nsw.gov.au.

Clr Mathew Dickerson

Mayor of the City of Dubbo



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