Is Rate Capping Sustainable

With the Liberal State Opposition declaring they intend to keep Council Rate Capping on the Agenda for next State Election I wonder what is their approach to ensuring Councils remain sustainable?

 

In this my second blog post on the question of rate capping I ask the question how the Libs expect Councils to be sustainable.

Rate CappingKeeping rates as low as possible is a goal to strive for. They must on the other hand be struck at a level that can sustain the councils obligations to their community as defined in the Local Government Act and beyond. I say beyond because State Governments have a tendency to shift services they provide to councils.

They do this without legislating a means by which the service can be funded by Councils. This amounts to the Government cost shifting these services to councils. For instance we are regularly being asked to more in the health arena.

We have rate capping in other forms already imposed on Councils that are subsidized by rate payers. One such area is the cost to process development applications which Councils are required to do under the Development Act. As someone involved in the building industry I have long been aware that councils cannot cost effectively process development applications, particularly to the vast majority of applications they receive. These are for minor developments such as house additions, verandahs, swimming pools and the like.

The fees simply do not cover the cost of the smaller project and as a result you, the rate payer, pick up the tab.

Our Mayor has voiced his support for rate capping but if you read through his blog you will see he has raised the spectre of Councils finding other income sources. His thoughts can be found on his personal blog page here. They are astute observations but I venture to suggest we have a horse and cart thing here. What comes first.

Looking at other sources of revenue is a good idea but in my opinion this must come well before rates are capped or otherwise interfered with. As a public entity we must be very discerning about from where we might derive additional income to rates. Having said that the Government of the day could seriously take pressure off rates by ensuring that councils are fairly compensated for other activities they are required by statute to undertake, like the example given above.

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