Mayor’s View – 19th February, 2009
The rate notices that were mailed recently drew rate payer’s attention to council priorities, efficiency and value for money.
For many people such as absentee land owners, or owners of vacant land, the value they get in terms of service is very little. However the majority of our rate payers are able to make use of the local public assets maintained by council – parks, ovals, roads, lighting, libraries etc.
I have always held the view that rates should primarily be regarded as a fee for service, but in reality they are a tax on wealth, in the form of the unimproved capital value (ucv) of land. That is, the value of land without improvements – such as buildings.
This asset is taxed regardless of the landholder’s ability to pay, notwithstanding that it is already taxed by the state through land tax. Unfortunately owning land assets does not always equate with the capacity to pay.
In the Cassowary Coast Region the rates we charge are already higher that the Queensland per capita average and the incomes in the Cassowary Coast are lower than the Queensland average. Despite this, we received the lowest grant of twenty comparable councils in Queensland from the federal government last December. This is primarily because of our high ucv’s, which reflect the high price per hectare of agricultural land used for sugar and horticulture. The federal grant system essentially says ‘we will penalise you because you do not raise enough in rates relative to your ucv’s’.
Letters to both the federal and state governments and the Grants Commission have pointed out this presumably unintended detrimental effect on our rate payers. We are yet to receive their response. We are not alone in this dilemma, as it also affects other similar regions such as the Herbert and Burdekin River valleys.
Council has no influence on ucv’s .
Large rises were predicted, but the state government recently advised that the Cassowary Coast Region, along with several other regions, will receive no ucv increases this year.
The rates for 2009-10 will therefore be based on the same valuations as applied in the years before. Had a significant increase applied, council could and would have compensated by adjusting the rate in the dollar.
The increase to apply in the new financial year will therefore have only two major contributing factors – an increase reflecting inflation and some adjustments to equate rates across the region.
The costs of amalgamation have been substantial, but many of them are behind us.
Council is bringing about efficiencies, natural attrition in enabling the workforce to be restructured and the benefits of amalgamation beginning to be seen.