18 June 2019
In the 2018/2019 Budget, a number of ratepayers with sizeable Unimproved Capital Values incurred hefty rate increases due to the Road Levy being treated as an operational cost instead of a Levy.
This transaction was open, transparent and not difficult to explain. However, a number of ratepayers were unimpressed with increases of up to 20% in some cases. When the Road Levy was first introduced in 2013, a large section of the rate base with low property values incurred large percentage increases also. In fact, there were in excess of 3,300 ratepayers who incurred increases of 30% to 40%. Some were even higher than 40%. Again, this was not greeted favourably by property owners with low unimproved capital values. There are other scenarios that can be thrown in to make the debate sound worse than it really is. The reality is, some ratepayers in both situations paid a larger percentage increase than the average general rate increase. In both instances, the initial introduction of the Road Levy and the decision to regard the Road Levy as an operational cost, there were groups of people unhappy. I will defend the choice of Councillors at the time to make these decisions, because the resolves were made as part of a process to deliver an outcome – to FIX THE ROADS.
In the past 12 months, the additional money and changed operational activity has progressed road improvements into very positive territory. There are numerous messages of customer satisfaction and compliments regularly coming to the office. In both situations of Council’s decision, 2013 and 2018, there was no discrimination. Each rate category shares a certain percentage of the cost to run the business of Council. These decisions are calculated based on valuations. Rates are not calculated on the basis of how much money or how little money you earn or your capacity to pay. Rates are calculated based on unimproved capital values and how the Valuer General’s Department values property. Council has nothing to do with the Valuer General Department’s calculations.
I anticipate there will be anxiety among some ratepayers again when the result of the 2019/2020 budget is released. I would encourage ratepayers to acquire as much knowledge as possible to understand the quandary that Councillors are confronted with when these challenges impede the decisions that need to be made.
The final point is that Council represents the interests of the entire rate base of 17,500 ratepayers by being consistent and transparent. Further work is intended to look at the possible creation of additional rating categories to assist with smoothing tools.