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Bigger Rates Rebates Not The Answer

Bigger Rates Rebates Not The Answer

The Prime Minister’s promise to provide increased rates rebates fails to address the real problems that are resulting in ratepayers being stung for ever-increasing rates, says Don Nicolson, Chair of the Local Government Forum[1].

“With rates rising at well over twice the rate of inflation, pressure has been mounting to do something about the growing rates burden. Councils are the biggest monopoly group in local communities with the absolute power to extract rates from ratepayers.

“The Government’s response is to provide rebates of up to $500 per year for people with income up to $20,000. Rebates of up to $200 per year are currently available but apply up to a considerably lower income threshold ($7,400).

“The promised higher rebates will be good news for some, but will only be a stop-gap as runaway council spending will create pressure to increase the rebates further.

“A better approach would be to encourage councils to focus on their core business, the provision of local public goods. This would help contain spending and therefore the demand on the ratepayer. A meaningful review of the funding of local government and its reliance on property value-based rates is also required.”

Mr Nicolson is also concerned about the likely impact on accountability and participation in the affairs of local government. “At present, one of the few checks on councils is that ratepayers can and do get angry and demand change either through the annual plan process or at the ballot box. By increasing the rebates there will be less motivation for many ratepayers to demand change, as they will no longer bear the full costs of rates.

“The result will be greater apathy in the affairs of local government, lower election turnouts, and a further tilting of the uneven playing field against businesses and farms, the groups that already bear the brunt of local government funding demands.”

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