By Jenel Hunt
Council rates will rise, but we’ll be fair. That’s the message from Southern Downs Regional Council Mayor Councillor Vic Pennisi.
“I’m not going to sugarcoat it; rates will go up because our costs have gone up. But we will try to ease the pain as best we can,” he said in an interview with Warwick Stanthorpe Today on Thursday 30 March.
The property boom saw the sale amounts of many properties skyrocket and this has resulted in massive increases in land valuations in some areas. Many residents who received their valuations last month are now worried about how that might affect their council rates.
“Be assured, if your valuation went up by 300 per cent it doesn’t mean your rates will go up by 300 per cent,” Cr Pennisi said.
“That’s a simplistic view and it’s not at all accurate.“
But he did warn property owners that if they thought their valuations were incorrect they would need to apply to the Valuer-General (Department of Resources) very soon.
People only have 60 days from the day of issue of valuation to put in an objection, but they must provide information that demonstrates it is incorrect. If you received your valuation on 17 March, you would have until 16 May to lodge your objection.
“You can challenge their figure if you have enough evidence, but you need to give substantive information to argue the case. That said, there are times when they do get it wrong and they will adjust the figure accordingly,” Cr Pennisi said.
The information on how to submit an objection is in the paperwork that people received (either by post or email) with their stated valuation amount. An approved form, which can be found on the website www.qld.gov.au/landvaluation, must be used.
Cr Pennisi said the council paid about $250,000 towards valuations every year but valuations were not done annually. Sometimes valuations happened every three or five years, so if property prices had skyrocketed in that time, the sale of property could reflect the big increase in the market when the valuations came out.
In the meantime, although the council had to use the land valuations given for the 22,000-odd properties in the Local Government region when doing the calculations for the rates, there were ways it could help ease the pain.
He said there was a factor, known as the rate in the dollar, which could be massaged downwards in the kinds of situations where valuations had made big impacts on some property owners. In that way, the minimum general rate could be adjusted to ease the burden.
“We use the land valuations on the different categories – urban, village, rural, rural residential, commercial et cetera – to calculate the minimum general rate, and adjust the rate in the dollar to help smooth out the big increases in valuation.
“The council doesn’t get a say in what the valuations are, but we do have a number of options at our disposal to help reduce the impact. One of those is how we are able to average the rises. However, there will always be winners and losers, and it’s difficult to get every valuation aligning to the average increase. But with the ability to adjust the rate in the dollar down, the use of averaging, the use of banding, the use of capping and if necessary striking a new category, we do have the ability to reduce the impacts of these incredible valuation increases.
“In some instances and without the use banding, you could potentially have people paying an exorbitant amount of money. Banding allows us to reduce the impost,” he said.
“And even after capping and banding, if it’s still too much we can split the rise over a three-year period to smooth the increases.”
There was also an outlier possibility – that a category could be changed.
“We can strike up a new land category especially for big rises in just one specific area.”
Categories needed to be identified by the land descriptions and as such must be able to be defended if challenged, so it was a tool that could be used in an exact and limited way in special circumstances if the impact was too great, he said.
Cr Pennisi said the council needed about $90 million, plus or minus, to operate for a year.
“To paint this with a broad brush, it could be $30 million from rates, $30 million from fees and charges and $30 million from grants,” he said.
“So we have to get a certain amount from rates, but we can use the tools of the factor, capping and banding to smooth things to make it fairer for individuals who have been hit with high land valuations.
“We try to be fair in everything.”
That was one reason that the council had worked hard over past years to move the sewerage, water and waste charges out of general rates and make them business units of council. Being an amalgamated council, the Southern Downs Regional Council started its life with different methods across the previous Local Government areas but with the same model gradually applied across the board and the use of averaging, ratepayers now had some level of parity in the Southern Downs.
The number crunching for next financial year’s budget should be final enough in May to be able to advise residents what the actual rate rise would be, he said.
Cr Pennisi said it had become very clear that existing funding models for Local Government was not sustainable.
“A council in a mining area might get an injection of $50 million of industry money, but we’re not in that fortunate position. Yet we have to find other income from somewhere. We have to find innovative ways to put downward pressure on rates. And that’s a conversation we’re having right now.“
