You are here

Rates and Taxes: Time to push back against council rates

The article below is about cost-shifting to local councils to cope with increasing demand for infrastructure and services. This is of course a reflection of population pressure. The councils once could limit the amount of new homes and development but their capacity to do this has been greatly eroded by state government. The state governments have also left councils with little option but to borrow and to gouge residents with higher rates to cater to ever increasing costs of population growth. Just as there seem to be no limits to population growth in Victoria, there are no limits to local rates in Victoria. The article below is an extract from Cardinia Ratepayers and Residents Assn Inc Newsletter.

There is a limit to tax charged under government legislation. There is no limit to Council rates that are charged at whatever level a Council decides upon in a financial period of up to four years. Federal taxes are calculated on income, sale of goods and service, stamp duty etc. Council rates are based on fluctuating property values and calculated on estimated necessary expenditure, not affordable expenditure. Somehow taxes have become merged with rates due to cost shifting from government onto local councils. Until ratepayers understand they are actually paying extra tax via council rates, requests for rates relief will fall on deaf ears because councils are delivering services and infrastructure beyond their financial capacity in order to comply with government policies of continuing growth and expansion.

The notion of “local government“ has been officially and politically perpetuated to legitimise the cost shifting carried out at state and federal level .

Government grants and financial handouts blur the reality of this situation. Ratepayers must look carefully at what they expect in return for taxes paid to government and what they receive in return for annually increasing rates paid to the local council. Rates and Taxes.

There is a limit to tax charged under government legislation. There is no limit to Council rates that are charged at whatever level a Council decides upon in a financial period of up to four years. Federal taxes are calculated on income, sale of goods and service, stamp duty etc. Council rates are based on fluctuating property values and calculated on estimated necessary expenditure, not affordable expenditure. Somehow taxes have become merged with rates due to cost shifting from government onto local councils. Until ratepayers understand they are actually paying extra tax via council rates, requests for rates relief will fall on deaf ears because councils are delivering services and infrastructure beyond their financial capacity in order to comply with government policies of continuing growth and expansion.

The notion of “local government“ has been officially and politically perpetuated to legitimise the cost shifting carried out at state and federal level .

Government grants and financial handouts blur the reality of this situation. Ratepayers must look carefully at what they expect in return for taxes paid to government and what they receive in return for annually increasing rates paid to the local council.

Original article at http://www.crra.org.au/news13/news1314.pdf

Comments

Local council are where the rubber hits the road of high rates of housing and population growth, and where the overloaded services costs blow out. Local councils do not have the ability to make laws, or change laws, and are superficially meant to collect the garbage, cut public trees, ensure street lighting and approve of building plans.

Federal governments are responsible for "growth" agendas, but Councils are at the forefront of having to cope with it - without redress to change law and policies.

Angry Mayors: how population growth frustrates local councils

The level of frustration with inadequate finance for required infrastructure upgrades is high, and population growth is the reason behind rate hikes. Local government finance reform is overdue.

If Councils can't cope with the growth, they are criticized, but rate payers are forced to pay the costs not at the decision-making level, but at a level that has no say regarding our demographics.

In 1997 my council rates were $469.50. My rate notice for 2015 is $1878. If they quadruple again in the next 18 years my bill for the year 2033 will be $7,512. My income will need to increase 8 fold from 1997 for the rates to remain as affordable. My income will not be 8 times what it was in 1997 nor will it be 4 times what it is now.

A TULLAMARINE woman says she is baffled that Hume residents are forking out higher household rate percentages than those in more prestigious suburbs.

Lucia Natale said the value of her home had dropped by more than $50,000 since the last valuation, but her rates had fallen by just $70.

Hume’s rate in the dollar figure is higher than Stonnington, which included white collar suburbs such as Toorak, Windsor and Prahran, and the Macedon Ranges, which has many million dollar homes in towns such as Mt Macedon.

Hume Council defends household rate increase -due to "growth"

Hume’s needs as a *growth municipality* were greater than those “of a more settled nature” and that new works and facilities had to be met together with maintaining existing assets. So, residents must pay the costs of population growth, even though it's not in their interests, or decided democratically.

Stonnington is not a "growth" council, unlike Hume. It's population growth that always stretches budgets and blows out their spending. Dis-economies of scale mean increasing costs and inefficiencies. Services must be expanded continually to cope with more properties and more services but councils have no political power to change legislation forced onto us.