The Office of Local Government (OLG) behaved like a thief in the night by waiting until just three days before Christmas to circulate its Exposure Draft Bill on Local Government Rating reform.
According to the
OLG Announcement, the
Bill proposes to implement key elements of the
NSW Government’s response to the
Independent Pricing and Regulatory Tribunal’s (IPART’s) review of the local government rating system, which was released in June 2020.
The OLG asserts that the proposed legislative changes would:
• allow those new councils created in 2016 that have not already harmonised their rating structures to do so gradually over four years
• allow councils to levy special rates for infrastructure jointly funded with other levels of government outside the rate peg without IPART approval,
• create a new rating category for environmental land,
• create more flexibility for councils to create rating subcategories for residential land, business land & farmland, including vacant land,
• amend exemptions that apply to water & sewerage special rates & to land subject to conservation agreements,
• require councils to report the value of exemptions they grant each year,
• narrow scope to postpone rates & let councils choose whether to write them off, &
• allow councils to sell properties for unpaid rates after 3 years rather than 5 years.
While the association accepts that some of the proposed legislative changes may be beneficial or have little direct impact on ratepayers, more importantly it believes that the proposed changes represent a deliberate move by the NSW State Government to empower councils to increase rates while, at the same time, removing one of the few existing protections for ratepayers against unjustified increases.
The association is particularly alarmed by the OLG’s proposal to allow councils to impose Special Rate Variations over & above the Rate Peg without the need for independent review & approval, as is currently the case.
The association believes that this will mean that foreshadowed plans by council to raise a Special Rate Variation of $2.028M annually to underwrite the alleged net operating costs of the shire’s six swimming pools & to provide funds for their capital replacement, in perpetuity, could be pursued & approved by council, without external review & approval, while recourse for ratepayers who oppose such imposts will have no independent avenue to pursue their objections.
The association believes that the proposed arrangement will encourage councils to gouge ratepayers, while continuing to spend beyond ratepayers’ means, safe in the knowledge that they can simply pursue further funding whenever they think that they might need it.
Why do we think that council would behave in that way?
Simple really.i
Council has consistently demonstrated that it is unable or unwilling to contain its
Operating Expenditure within its
Budget in 9 of the past 10 years, spending $862M over that period, with an average annual overspend of $5.7M & contributing to aggregate Deficits of $21.3M over the decade.
By making it easier for councils to impose rates beyond the Rate Peg, free of independent oversight & approval, the association not only believes that there will be a direct disincentive for them to pursue efficiencies & cost savings, but that the capacity of residents & ratepayers to oppose such actions will be significantly diminished.
The
OLG has called for Public Submissions in respect of the proposed legislative changes (see
here).
The association believes that it is in the interests of all residents & ratepayers to scrutinise the proposed changes & make a submission expressing their views on those proposals.
A copy of the draft
Bill can be found
here & a
Consultation Guide for making Submissions here.
Submissions should be forwarded to the
Office of Local Government,
Locked Bag 3015, Nowra, N.S.W., 2541, or emailed to
olg@olg.nsw.gov.au, before February 5th, 2021.
John Richardson
Secretary/Treasurer
Bega Valley Shire Residents & Ratepayers Association
Tel: 0264945669
Website: http://www.begavalleyshireratepayers.asn.au