In this week’s THINKING ALLOWED, Bibra Lake resident COLIN NICHOL looks at a rates sleight of hand.
COUNCIL rates creep up by quietly compounding; they increase upon increases.
For instance, an increase of 2.9 per cent for 2018-19 in Fremantle’s case may have been described as including a “one-off” bin charge by the council to partly fund FOGO, but was actually an undeclared rates increase.
It was carried forward and included in the amount that the 1.8 per cent increase for 2019-20 was calculated.
That rates yield was therefore enhanced beyond immediate appearances.
The council is now protesting the FOGO charge was not intended as a “one-off” but has also announced: “The City of Fremantle will start delivering the new bins to households from 16 September and it will take about five weeks for the entire roll out to take place.”
That is this coming September, not last year’s, so the charge was initiated a year ahead of the service.
They announced the two per cent for a finite one-off “roll-out” event, not a continuing charge as it now is. On top of that, their media releases repeatedly stated, “There would be no additional charges for the bin which would be covered by rates”, and “All City of Fremantle waste management services are covered by your rates”.
It seems there’s no additional charge and it’s covered by the rates because the rates have been quietly increased to cover it.
So it was neither a “one-off” nor a single “roll-out” charge, but in the face of struggling city finances due to the Kings Square redevelopment it was a version of the philosopher’s stone– turning base rubbish into rates gold.
They originally promised to build the new administration building with nothing more than CPI rate increases but have had to resort to alchemy.
The need to review council rates, along with the way they are calculated.
Across NSW the total annual increase to the amount of income that a council can raise from certain rates and charges is limited by the “rate peg”, which is determined by the Independent Pricing and Regulatory Tribunal.
Is any such legislation planned for here? The WA government is currently reviewing the Local Government Act. Government minister Alannah Mactiernan hints: “I ask all local governments to be aware of the current economic environment, with low wages growth and some retailers struggling and show restraint when framing their budgets and rate increases.
“Rates, fees and charges is one of the key topic areas for this review. All ideas and options will be considered during the review process, to determine the best rates system for Western Australia.”