Rates harmonisation is the process of adopting one rating structure across the three former shires. No additional money is collected as a result of rates harmonisation, rather it is a redistribution of rates based on the value of their land across the new council area. Rates harmonisation does not involve the fees for water, sewer or rubbish collection which are levied separately.
With a much larger area to consider as well as three (3) towns and numerous villages the differences in values are significant. Council adopted a new rating structure that had the least impact on the least number of people relative to their previous rating structures. None the less there will be a significant change in the amount of rates to be paid by some, particularly in the farming category where the difference in land values across the new council is most pronounced. It is worth noting that rates from the rural zones raise nearly 70% of all rates revenue for Council.
As most are aware, rates are made up of a fixed charge (the base amount) and a variable charge (the ad-valorem charge). My preference would have been for a higher base rate which recognises that all residents and ratepayers have the same access to services such as roads, pools, libraries, sporting facilities etc as each other. Some in the rural areas would argue that their access to these services is affected by the lack of good quality roads.
A higher base charge would have then reduced the amount to be raised by the ad-valorem charge so the impact of the differential in land values across the much larger Hilltops area would have been less significant on many rural rate payers.
This week Council will start to consider public responses to the draft LEP document. As with rates harmonisation it is a tricky process. As a Councillor, one of the most frustrating aspects is trying to get the urban based State planning bureaucrats to recognise how short rural towns are of development land, and therefore the need to have land rezoned as residential is imperative. Any changes to zoning proposed by Council under the LEP must be approved by the State planning authorities.
These decision makers rely on historic growth numbers (of 1-2%) for our towns, they look at a map showing the vacant blocks that exist and respond that there is enough land to cater for future growth within land being re-zoned. Most of these vacant lots are not for sale and never will be.
It has been a developing problem for a number of years in Harden, Young and Boorowa and made significantly worse by the effects of COVID and the resultant urban rural migration. There are so many opportunities in rural Australia, and particularly in the Hilltops area where we have a productive farming community which provides a stable base for business, but it is hard for growth to occur if there isn’t anywhere for people to live.
A significant deficit is forecast for 2021-2022 financial year which will carry through for a number of years. The three (3) former shires were never flush with funds and the reality is, amalgamation has seen operating costs rise substantially whilst revenue (excluding grants) has remained unchanged.
Grant revenue has risen substantially on the back of numerous State and Commonwealth backed programs to boost growth in regional areas. We have been the beneficiary of many new or upgraded sporting facilities, community facilities including playgrounds and halls, bridges, roads and so on.
They will have lasting benefit to community, but it has been costly on Councils’ resources to oversee their construction particularly whilst in the process of merging three (3) former organisations. The new facilities, roads and bridges also significantly increase the depreciation charge in the budget which in-turn reduces Councils’ profitability (or lack there of). Councillors and staff have some tough decisions to make sooner rather than later, on how to deal with the financial situation. Sales of non-performing assets and productivity gains in operational areas should be considerations before a special rate variation, but even it will need to be part of the conversation.