LOCAL government minister Tony Simpson has backed Melville council dabbling in the property market.

At a special budget meeting, former councillor Effie Nicholson had asked why the council was “speculating” in the property market and competing against private investors, warning if prices dived the council could find itself losing money.

But the council’s director of corporate services Martin Tieleman delved into the Merriam-Webster dictionary to argue there was nothing speculative in the property investments.

“The net cash return on commercial properties is currently in excess of $1.7 million per annum which saves ratepayers paying the city that amount in rates,” Mr Tieleman said.

“This amount received represents a 2 per cent rate reduction year on year.

Councillor Nick Pazolli, who’s Ms Nicholson’s brother, backed her concerns, and tried to strike out a section of the rules governing the council’s property reserves which allow it to purchase developable land parcels.

Cr Pazolli says the council should focus on buying properties with a specific community purpose, and financial returns should be a secondary priority.

Mr Simpson says there are no restrictions on councils investing in land.

by TRILOKESH CHANMUGAM