Council rates at risk in NSW land valuation bungle

By Julian Bajkowski

Substantial miscalculations in the value of rural land have come back to bite the New South Wales bureaucracy after Broken Hill City Council confirmed it wants the state to stump up almost $7 million in overcharged rates that were levied on mining company Perilya.

NSW Minister for Finance and Services Greg Pearce will hold crisis talks with the local government today in an effort to find a way through the latest financial bungle after Perilya won a landmark court case in the NSW Land and Environment Court (LEC).

The miner successfully sued on the basis that the NSW Valuer-General had overstated the value of the Broken Hill property by around four times.

The LEC has put the land’s value at just under $5 million whereas the state’s official valuer had reckoned it to be worth just over $20 million.

The size of the valuation disparity is certain to be a cause of concern not only for Commerce Minister Greg Pearce but local governments across the state who could potentially be forced to hand money back to land owners and the mining sector if calculations were inflated.

The court win by Perilya is the latest financial headache for NSW councils which have found themselves scrambling to keep project funding flowing some artistic balance sheet juggling by Canberra that reworked the timing of Financial Assistance Grants (FAGs) to local governments.

The accounting manoeuvre resulted in what the NSW government called a negative adjustment to FAG payments, forcing councils to find money elsewhere of cut spending.

Mr Pearce has already signalled that he intends to reform parts of the Valuer Generals Office as a way to prevent further errors.

However it is not only the Commerce portfolio that has suffered from the problem of rubbery figures.

The NSW Treasury and Treasurer were earlier this year left red faced after the NSW Auditor General highlighted $1 billion miscalculations in the state’s Budget which transformed a deficit of $337 million into surplus of $680 million courtesy of errors that were branded as “unacceptable” by the official number cruncher.
 

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0 thoughts on “Council rates at risk in NSW land valuation bungle

  1. The valuation provided by the V G was probably correct. This case was heard by a judge who also said that the Land Value of a Golf Course in Southern Sydney was Zero. Yes Zero. That result has been overturned on appeal, as is likely for this case. If one was cynical one would think that some judical person was trying to make a name for himself.

  2. Hi Julian, I agree with your article. We owned 200 acres(as an add-on to our primary production business – main place of business being 300 klms away) within a 10 minute drive of Tamworth valued at $328,000 as at 1 July 2010 (received update on 28 January 2011); sold 100 acres to the neighbour and received a new valuation on the remaining 100 acres as $300,000 (received update on 6 November 2012). Both valuations are valued by the Valuer General’s Department. The 100 acres is still used as an add-on for our primary production business. Nothing has changed except the valuation!!

  3. our property valuation more than doubled and is now greaater than 50% of the market value. the property is 480 ha cattle farm near Narrabri. no luck appealing the valuer generals decision

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