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Rates change could cost council

THE Snowy Valleys Council will object to an Independent Pricing and Regulatory Tribunal (IPART) recommendation that changes to rates won’t result in a windfall for councils.

IPART has previously recommended that commercial enterprises, such as WaterNSW and Forestry NSW, should be made to pay council rates.

It has also recommended that the money from these rates would not go to the council to be spent as it decides, but rather councils would be forced to distribute the extra cash amongst other ratepayers.

This would result in a reduction in rates from some payers.

However, Snowy Valleys Council Interim Manager Bob Stewart said it is far from guaranteed that the changes would result in lower rates for residential landowners.

“If the enterprise is agricultural, for example, which would fall into the classification of rural land, it might be only land in that classification that would benefit – we don’t know yet,” he said.

“If it was a resort in a national park then that is a commercial or business classification, and [the money from the rates] would likely have to stay in that category, depending on what they decide to adopt.

“We’re saying that that’s unfair. We [the council] should be able to have the increase in the notional income.”

The council will argue that the increase in rates will also result in an increase in cost for the council.

Snowy Valleys Administrator Paul Sullivan said that there would be a significant cost involved with the maintenance of commercial crown land – particularly to do with roads – and that, if the rates are redistributed, council would be unfairly forced to weather that cost.

It is unclear yet what sorts of responsibilities council would take on in terms of currently unrateable land, but if there are added responsibilities, such as maintenance of forestry roads, there will almost certainly be an added cost.

Mr Sullivan said the changes were likely to negatively affect the council’s bottom line.

“If we have to take over [commercially used] crown land, well there’s an awful lot of roads in crown land. It’s really about: what is the net benefit, and unless we get some more details we will object [to redistribution amongst other ratepayers], to the overall advantage to our ratepayers.

“If we start charging them rates they’ll start handing [their public road maintenance] over to us. It’s not guaranteed but its probable.

“It would be great to have more rates with no expense, but unfortunately there are other realities. ”

Snowy Valleys Council will object to the specification of how the rates would have to be redistributed, and request that they be able to spend the extra money as they see fit.

If the NSW government doesn’t heed their objection then previously unrateable commercial enterprises will have to pay council rates, and the extra money will be redistributed among existing ratepayers in the form of lower rates.

The IPART review also recommended that: “Allowing councils with diverse communities to set rates that reflect differences in access to, demand for, and cost of providing council services across their local area would improve equity and efficiency.”

In this region, that opens up the possibility for different areas within the new Snowy Valleys Council to pay different rates depending on how many council services they receive.

However, Mr Stewart said the council was still a long way from deciding how rates would be set after the post-merger four year rate freeze that has been put in place.