Review of Council's Rating method

All of the Rating Options used in the Discussion paper are based on a vacant land rate of 137% and the demonstrated effect is to give them a solid reduction in rates payable, their gain coming at the expense of residential rate payers. The paper above says "Council would also like to reduce the higher differential rate it applies to vacant land." no explanation is given as to why Council would like to favour this group at the expense of resident rate payers nor is there any argument in the discussion paper which would justify it.
Why are there no options modelled with vacant land being rated at higher levels, say 200%, especially when one considers (a) the stat in the discussion paper which says that Yankalilla has twice as many vacant properties as similar councils, (b) holding vacant land is often a strategy to distort market prices of land, and (c) vacant land owners, by definition, are absent and so give nothing to the Council - they don't buy goods and services from businesses located in the council, they don't support the voluntary organisations in the council area i.e. they do not stimulate business and thus rate revenues in the council
area and they don't support the community. Why should they be given a rate gift?

Council needs to explain why it favours the vacant land-holder group. It needs to provide decent arguments to support any of the options other than the status quo. And it needs to explain why it did not present options which favour the residential landholders since they are the source of most revenue and also the growth factor in total Council revenue.

Council should consider lowering the residential rate and raising the vacant land rate - a substantial differential here would send a message to vacant land owners - it would provide an incentive to sell or develop.. If the vacant land was reduced to 8% then that would mean a significant increase in new residences and a significant increase in gross rate revenue received by Council.

J. S. Dawson

Here are some historical figures for our marginal primary production section:
1988 was $53 000 rateable value and cost $147.87 in rates for year
2002 was $95 000 rateable value and cost $437.95 in rates for year
2010 was $180 000 rateable value and cost $667.98 in rates for year
2015 is $200 000 rateable value and cost $924.90 in rates for year.

Our property has increased by 3.77 times over these 27years. However, the rates on the property have increased by 6.26 times. That is, Yankalilla rates have increased by twice the capital value of the property in 27yrs. I’m told that property is a good investment but we would rather get a return like Yankalilla Council. It would be great to bumble along losing or wasting money in the knowledge that you can unilaterally decide to remove more money from resident’s pockets and they have no say in the matter.

Equity in rating is a fine ideal. However, there is clearly no equity in Council services and neither do we expect it. Where we are we have no refuse collection, no street lighting, no drainage or other services available to residential properties in townships, presumably this is why we have a differential rate.

Frankly, I cannot see our proportion of rates remaining the same or getting less under this proposal and history tells us not to expect a proportional increase in Council services under the new approach. My request is that Council is a little more fiscally responsible and that they keep the rate rises in line with the CPI.

It is a longstanding general principle of local government that responsibility for rates should be shared in an equitable manner. Rating vacant land at $170% of residential is not a fair share nor does it achieve leverage for development of the land. Buying an average block in a development In the Yank area attracts annual rates of $1000 or more until development, who wants to pay that? Other councils have imposed fixed charges and 150% for vacant land. The community benefits from seasonal increased tourism and this would not occur if not for the holiday housing, they should be rated the same as any other residential property.

I presume replacing the minimum rate with a fixed rate will mean an increase in rates, I don't think primary producers should be disadvantaged with this idea,( I'm not a primary producer, ) I think for the services we get in this area we pay over the odds compared to other councils, when you say a fixed rate how long will it be fixed for ? or will it rise each year ?

Three matters immediately leap out on reading the discussion paper.
1. The paper ignores the fat that almost 40% of "residential properties" are not in fact residential, but are commercial holiday housing.
2. The is no strategic discussion. What is Council trying to achieve.? Do they have an understanding that the high vacant land rate came about because there were excess vacant residential blocks which were accruing depreciation of infrastructure or up to 15 years. The rating of vacant land is a lever to achieve balance in the demand and supply of land for building. This can be empirically assessed, but there is no sign that such calculations have ben done.
3. The is no acknowledgment of the issue of rate exempt government land that has been leased for private commercial gain.

.The paper as it stands is light weight and a much more strategic approach is needed.

Having read most of the discussion paper it would seem that the big loser out of all options considered will be residential property owners. To argue residential rates will only increase by a few percent shows an all too typical lack of empathy by those in Government. As it is rates increased at over double CPI last year. It was only a couple of years ago that you though it appropriate to increase the differential rate for vacant land to 170%. Now you want to drop it. What will be your great big new idea for next year?

I have read and reread the convoluted codswallop in the Rating Review brochure and finally found the discussion paper. I do not understand why there is to be a review and why that is to be finalised during the "Holiday" period.
Why is there to be a review if the total rate revenue is to remain the same? I note the stated purpose of the review is to ensure that Council’s rating system satisfies the principles of taxation and is
equitably applied to all ratepayers. Is this not so currently? If not why not?
I also note that the documents claim there may be a potential reduction in the vacant land differential rate. If this is a reason and total rate revenue is to remain the same, then it becomes obvious that all occupied land rates will increase.
Please start the review with a properly articulated reason for the review and some anticipated effect on our rates?
Peter Vandepeer OAM

I have just read the rating review brochure and chased down the Discussion Paper, which should be easily visible on the Council Web site.
I have read and reread the convoluted codswallop in the Rating Review brochure and finally found the discussion paper. I do not understand why there is to be a review and why that is to be finalised during the "Holiday" period.
Why is there to be a review if the total rate revenue is to remain the same? I note the stated purpose of the review is to ensure that Council’s rating system satisfies the principles of taxation and is
equitably applied to all ratepayers. Is this not so currently? If not why not?
I also note that the documents claim there may be a potential reduction in the vacant land differential rate. If this is a reason and total rate revenue is to remain the same, then it becomes obvious that all occupied land rates will increase.
Please start the review with a properly articulated reason for the review and some anticipated effect on our rates?
Peter Vandepeer OAM

I agree with Andy L - the reasons for change are not clear. If the total rates collected stays the same then please be clear about which ratepayers are the winners and which are the losers.
Does 'equity in rate distribution' mean reducing the burden on families least able to afford it or reducing rates on landholders at the top end of the real estate market? Graph 3.1 without numbers could mean anything.
How will the rate distribution be 'more effective'?

I have just read both the "Rating Review, Your Rates, Your Say" and the "Rate Review Discussion Paper".

The first was confusing and the second added no clarification. But then I am not versed in the way of accountancy.

My big question is why and what are the needs for change? Neither of the above documents, from my perspective, even vaguely address these questions.

When the need for change is articulated, then I will be better positioned to provide reasoned input.