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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