Extract from the Age, February 21, 2013: Richard Willingham reported:
VICTORIA’S nearly 80 local councils do not properly consider the impact that rates increases have on residents, with ratepayers not afforded transparency on how and why councils set annual rates, the Auditor-General has found.
An Auditor-General’s report tabled in Parliament on Wednesday said the current rating framework lacked ”clarity, detail and direction”.
Victoria has 79 councils that all rely on the revenue generated by property-based rates and charges to provide services to local communities.
The report found that there was a ”limited assurance” that all councils ”systematically and rigorously” considered the information needed to understand the impact of rates proposals on their communities
”Councils primarily rely on their annual budget development process to engage ratepayers about rating decisions,” the Auditor-General said.
”While they do respond to ratepayer submissions as part of this process, they do not always adequately explain how they have considered their issues in the rate-setting process.”
In 2011-12 councils generated operating revenue of $8.18 billion, with rates and charges making up $4.09 billion.
The Auditor-General found that between 2001-02 and 2009-10, mean rates per property assessment in Victoria increased by an average of 6.3 per cent a year, outstripping Consumer Price Index rises.
The Auditor-General found that the state Department of Planning and Community Development did not proactively support or guide councils and could not provide assurances that laws for councils on rates were being applied.
It recommended that reporting of data should be improved and standardised so that it is consistent across all councils and easily interpreted by residents.
”Council engagement and communication with ratepayers on rating decisions and rate matters varied significantly in depth and quality. Councils do not provide sufficient or consistent information to ratepayers about their rating decisions,” it said.
The report also identified the major drivers of rate increases in 2012-13, which included the carbon tax, maintaining services and cost shifting by other levels of government.
Local Government Minister Jeanette Powell said the report showed the importance of the decision to develop a mandatory performance reporting framework for local councils.
“The policy development will help councils to develop a more strategic approach to the use of rates and provide the public with a better understanding of how their local council is performing,” Ms Powell said.
She said Local Government Victoria will release an updated rating strategy guide after the ministerial guidelines for differential rates – some councils charge pokies venues double rates to fund problem gambling projects – are finalised.
Shadow local government minister Richard Wynne said rates are a substantial impost on every household and that it was ”incumbent on all local governments to be as transparent as possible in informing ratepayers on how rates are collected and what they are used for”.