WA councils rail against rate capping


Local councils in Western Australia are gearing up for a fight after WA Local Government Minister Tony Simpson said he wanted a ‘discussion’ on council rates and WA Premier Colin Barnett called some council rate rises “unacceptable”.

Mr Simpson had initially threatened to hold a ministerial inquiry into council rates, which would have included the possibility of introducing rate capping – a regime loathed by NSW councils, that have been saddled with it since 1978.

An inquiry would have been sure to look at whether to yoke rate increases to the Consumer Price Index, which is currently at its lowest in years, or to the Local Government Cost Index, which measures how much council expenditure has risen.

Last month, WA Premier Colin Barnett slammed recent WA council rate rises, some of which were double the CPI of 2.5 per cent and said that the government was looking at ways of forcing councils to keep a lid on rate rises.

But the state government’s comments have left the WA Local Government Association (WALGA) hopping mad.

WALGA President Lynne Craigie has warned that if rate capping goes head in WA the state would wind up with drastically run-down infrastructure as councils scrambled to underwrite maintenance costs and spent far less on asset management, a process which she said had been happening for years in NSW.

Ms Craigie also hit back at state government criticisms of local council rate increases.

“Local Government is the only sphere of government that isn’t operating in a massive deficit situation,” Ms Craigie said.

“Criticism of local government rates’ increases above 5 per cent doesn’t compare to State charges increasing far beyond this such as the Emergency Services Levy, up 10.6 per cent; street lighting up 7.5 per cent and water up 6 per cent, to name a few,” she said.

“So if State charges are a measure of the cost increases that the community is capable of absorbing, council rates don’t deserve anywhere near the level of attention being directed at them by the Premier.”

She said rate capping would not improve service delivery to ratepayers.

“Rate capping isn’t good financial management. It creates a higher expense in the long run, that the State will ultimately have to take responsibility for.

“This approach begs the question of what the State’s true agenda might be. Whatever the questions are about Local Government, I’m absolutely certain that rate capping doesn’t hold the answers.”

Relations have been somewhat strained between local and state government in WA since Mr Barnett failed in his bid to reduce the number of Perth’s metropolitan councils from 30 to 16, following a backlash from communities and councils.

Mr Barnett has since blamed some of the highest council rates hikes on this failed amalgamation attempt, saying that in many cases it was smaller councils putting up rates and blaming councils for rejecting reforms, an accusation which WALGA rejects.

But Ms Craigie said that “a public slanging match” would not help diffuse the situation, “I would like to think we could have a genuine, adult, conversation about what concerns the State Government has and the best way to go about resolving them in partnership”.

“There is no denying that it’s absolutely critical we participate in a discussion with our State Government in the context of reviewing all taxes, including rates, in that debate,” Cr Craigie said.

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