Councils in regional New South Wales are facing the loss of millions of dollars in rate revenue, with State legislation separating land and water for rating purposes. Under the separation, land that includes a water provider, such as a dam or a creek, is valued for rating purposes minus that provider. This decreases the value of the land and therefore Councils’ rate raising capacity.
President of the Shires Association of NSW, Councillor Col Sullivan recently met with northern NSW Councils; the Federal Member for Gwydir, John Anderson; NSW Member for Barwon, Kevin Humphries; and representatives from the Department of Local Government and Valuer General’s Office to discuss the issue.
Col Sullivan was told that despite amendments to legislation designed to help Councils find ways of raising previous levels of rate revenue, some Councils face losing up to $3.5 million each year.
“Local Government isn’t necessarily opposed to valuing water separately – it’s our most important commodity and recognising its true value is crucial for successful water reform,” Councillor Sullivan said. “But many Councils in NSW were struggling to maintain services and infrastructure before the separation and the decrease of their revenue raising capacity. It’s another example of Councils being given increased responsibility – in this case water reform – without appropriate financial support.”
Possible solutions to the problem include transitional compensation, as well as a 20 per cent limit on rate reductions.
Councillor Sullivan, along with a delegation of Mayors and local Members of Parliament, hopes to meet the new Minister for Local Government, Paul Lynch, urgently to discuss these and other solutions.
“Councils simply want a solution,” he said. “They want to be able to raise the same amount of revenue that they could before the separation, or cover any shortfall. The amendments have given some Councils that flexibility and we’re grateful to the Government for that, but it’s a complicated way of doing things and hasn’t worked for all affected Councils.”
He said that while the Association hasn’t traditionally supported compensation because it isn’t a long term solution, transitional compensation could work because it allows a phased introduction.
