the-more-youre-worth-the-more-youll-payCr Don Hill makes his point to remove $34 million from the long term financial plans and therefore provide a one per cent rate reduction during council’s meeting on Wednesday. D052614

By Danika Dent

AVERAGE households in South Gippsland shire will be paying between $19.62 and $62.72 more on their rates this coming year.
Lower valued homes from $200,000 will get a rate reduction of $23.52.
The decrease on some of residential and farming rates is due to the removal of the waste services charge and the phasing out of the municipal services charge, which was set at $343.65 per rateable property.
Higher valued properties, and owners of commercial and vacant land, will see their rates go up, up to 7 per cent.
Residential properties valued up to $200,000 will have their rates reduced from $1316.30 in 2013/14 by $23.52 to be $1292.78.
Properties valued upwards from there will have their rates increased from $1506.15 ($250,000) in 2013/14 to $1525.77 – up $19.62; from $1696.05 ($300,000 valuation) to $1758.77 – up $62.72; and from $1885.90 ($350,000 valuation) to $1991.76 – up $105.86.
On average, council voted on Wednesday to increase rates by 4.13 per cent.
Mayor Jim Fawcett admitted “some people will get a surprise” in their rates notice, but said the differential rating system that was also introduced on Wednesday would “achieve a more equitable distribution of the rate burden”.
The announcement of a rate increase was not a surprise, but still comes as a disappointment to people whose submissions called for rate increases at CPI (currently at 2.7 to 3 per cent) or below, if at all.
Cr Fawcett, in presenting the budget papers, said rate increases were necessary and reflective of the economic climate.
“A common refrain in the community is ‘why do we always have rate rises?’ and that they are unsustainable,” Cr Fawcett said.
“Local government is the only government that has to report to its community each and every year about the amount of revenue it will raise.
“We do not have the luxury of growth taxes as do our state and federal counterparts, who can simply sit on their hands. Their budget papers indicate this, of a 6 to 8 per cent increase each year.
“When you’re looking at what goes towards working out what the costs are and what the rate increase will need to be each year, everyone accepts and seems to agree that CPI is a driver and that averages around 2.7%. It’s estimated over the forward years it will run out at 3% or greater.
“… The construction index and CommSec wage index are a more appropriate measure and they’re running at 3.4 and 3.2% respectively.
“Whichever one you intend to use, you will get around about a 3% rate rise to just tread water.
“You then need to add on some impact of growth.
“Growth doesn’t come without costs.
“In local government, growth does not provide revenue, it merely shares the burden across a greater number of people.
“That’s why our community should expect, and it is reflected in every council in Victoria, with the exception of good Ol’ Melbourne who make more in its fines that we make in total revenue – good Ol’ Melbourne can get by without a rate increase, but every other council has rate rises varying from around 3% to 5%.
“I take no comfort in the comparison, but … council cannot find year in, year out savings that will mean we don’t have rate rises.”

Unsustainable

Three councillors voted against the budget – Crs Don Hill, Bob Newton and Andrew McEwen.
Crs Newton and McEwen said the budget and rate rises were unsustainable.
Cr McEwen said council was treating its ratepayers like a financial ‘magic pudding’.
He condemned raising rates above inflation and said continuous rate rises were beyond the capacity of the community.
“Council’s finances are sustainable, when it charges rates high enough to cover expenditure,” he said.
“This may be sustainable for council, but not necessarily for the community.
“Average family incomes in South Gippsland are only $980 per week and we have nearly 30% of people earning less than $500 a week.
“For the latter, the proposed rates represent 6.2% of their income paid either through rates directly or through rents.
“Council’s rates in real terms have risen by 7.9% per annum for the past 10 years and will rise by over 7% per annum in the next 10 years.
“Families, farmers and businesses in difficult times pull their belts in and seek smarter ways to do things.
“Councils with their rating power have addressed difficult times primarily by increasing rates.”
Cr McEwen said while councils have 3.5% of government revenues and oversee 30% of assets, local government must advocate for an equitable share of government revenue and pursue a “more strategic business approach”.
He said the choice of increasing rates or cutting services was too simplistic and “shows little imagination or learning from other organisations”.
“Turning council around is like turning a large ocean liner around; it takes time and a large circle.
“Council to its credit has begun the process of taking a more strategic approach, with some areas showing dramatic improvements, but it has a long way to go.”