BURIED in the agenda for May 8 Fremantle council meeting is an item with the seemingly-innocuous title: “Advertising of the Proposed Differential rate for the 2024/25 Financial Year”.
This occupies only six pages of the agenda and three pages of the attachments – suggesting it is a relatively minor item.
Burying it on the second page of the Table of Contents and at the end of the agenda papers smacks of a “Yes, Minister” tactic of Sir Humphrey Appleby – if you wanted to be able to say the minister had been advised of something but didn’t really want the minister to see it, you buried it at the bottom of the last ‘red box’ so they’d either not get to it or be so tired they wouldn’t appreciate its importance.
There is also a two-page attachment setting out the “Objects and Reasons for Differential Rates for the 2024/25 financial year”.
At page 134 of 137 of the agenda, there is a table that, perhaps inadvertently, tells us by exactly how much the City of Fremantle is proposing to increase the general residential rates, as well as the differential rate categories.
The proposed rates in the dollar can be exactly compared with the actual rates for the current financial year set out in the 2023-24 budget.
The proposed rate in the dollar for 2024-25 is a 5.4 per cent increase on 2023-24, which, in turn, was a 9 per cent increase on the previous year.
Inflation in 2022-23 (March to March) was 3.6 per cent.
The Reserve Bank expects inflation to “decline to around 3.5 per cent by the end of 2024 and to reach a little below 3 per cent at the end of 2025”.
Fremantle ratepayers will be slugged with a 14.9 per cent increase over two years – some much more due to the vagaries of the valuer general’s revaluation of properties for last year.
If, for example, your rates increased 20 per cent in 2023-24, you’ll be paying 26.4 per cent more in 2024-25 than you did in 2022-3.
Expected inflation over the two years 2022-3 and 2023-4 is about 7 per cent – less than half the rate increase proposed by the City of Fremantle.
And for those in South Fremantle and City South, the item proposes an additional “service charge” of at least $842.86 a year (average $970) for seven years for underground power.
• IAN KER is a South Fremantle resident and former councillor at the City of Vincent. He’s delved deep into Fremantle’s finances and differential rates and sees some holes.
Buried
Why was this buried in an item on differential rates, without even a mention in the heading or the summary of the item?
And how is it that vacant residential land gets preferential treatment with a lower minimum rate?
Surely, the whole point of a higher rate for vacant land is to discourage land being left vacant, often to the detriment of local residents – the attachment on the item states: “The City considers the development of all vacant rateable land to be in the best interests of the community as it will improve increase the vibrancy of the city and neighbourhood centres”.
Nearly half the 9 per cent increase in 2023-24 was due to the full construction cost of the South Beach toilets and changerooms (still not even started, by the way – the funds have been carried over to 2024-25) being charged to the ratepayers of that year instead of being spread over a number of years through borrowings, as would be normal practice.
Normal practice, that is, unless you’re a local government that has exhausted its capacity to raise loans.
Now, if the South Beach facilities had been funded through loans, the combined rate increase 2023-25 would be 10.6 per cent – not 14.9 per cent. That’s still a hefty slug, especially at a time when many families are doing it tough, but still nearly one-third less than the City’s current proposal of 14.9 per cent.
But it gets worse – if that’s possible.
Total anticipated rate revenue is forecast to increase by 10 per cent ($5.8m) over 2023-24 – the difference from 5.4 per cent presumably arising from an increase in the number of rateable properties (or, in some cases, increased rateable values due to property improvements).
Moreover, since the $2.15m for the South Beach facilities was a one-off, the council effectively has $8 million more in operational funds in 2024-25. That’s an increase of 14.3 per cent in a single year during which inflation is expected to be around 3.5 per cent.
City of Fremantle gives the game away, however, in its plugging of the South Fremantle Underground Power Project, when it admits: “Construction is anticipated to start in 2026, but before then the City of Fremantle will need to build its reserves, to contribute to the project which is co-funded by Western Power.”
Cost overruns on the Civic Centre and the sale of revenue-producing assets have so diminished the financial capacity of the City that rates have to be increased to “build its reserves”.
Enough is enough!
It’s Time (yes, I do have a long memory) for the Fremantle community to insist on a forensic examination of the City of Fremantle’s finances and accounting practices, and to think seriously about a rates strike.