MOST Glenelg Shire ratepayers are set for a larger rate increase than normal in the new financial year, due to a major change in the way rates are calculated.

Councillors voted at their meeting last week to send the draft 2022-23 budget and fees and charges schedule out for public comment, as well as declare the rate for next year.

And there could be plenty of comment, given the changes to the way rates are calculated, driven by the rating strategy finalised earlier this year.

Chief among those is setting the percentage primary producers pay – previously they qualified for a 30 per cent rebate and now it is a differential rate set at 70 per cent of the general rate.

However, those two discounts are not the same.

The rebate actually equated to a differential rate of 55 per cent, meaning farmers will pay more.

But not just farmers.

As reported in the Portland Observer in February, setting the differential at 70 per cent is likely to see general residential ratepayers paying about $197 more on average, primary producers $547 more and commercial and industrial property owners an extra $275.

Those are average figures so some may be more or less than those amounts.

The other fly in the ointment when analysing the changes is that valuations have increased – on average in Glenelg Shire these have gone up by 35 per cent for residential property, 19 per cent for commercial and industrial and 37 per cent for rural land.

The actual rate in the dollar has decreased to take that into account, but when it comes to the most important calculation of all, things are not so clear.

To keep within the state government’s rate cap, the council has to increase rates by no more than 1.75 per cent on the previous year.

Clearly the average rate increases are far more than this – the budget shows the total taken from rates is 20 per cent more than for this financial year, as the actual amount in general rates raised this year was $19.9 million while the amount for next year is set about $23.9 million.

Which is $4 million more.

What the council has done to comply with the rate cap is to use two different figures for those calculations.

The rate cap calculation shows the amount of rates for this year about $23.3 million – so why the difference with the $19.9 million shown elsewhere in the budget?

That’s because in calculating that larger amount, it has included the $3.24 million primary producers would have paid had there been no rebate at all.

Fees and charges have gone up by a total of 1.75 per cent, though some of those are set by the State Government so have increased by more.  

Strategy questioned

FARMERS have been vocal about the changes to the rating system and two of them – Kevin Stark and David Headlam from Lake Mundi – made the long trip to Portland to ask questions at last Tuesday’s meeting.

Mr Stark said the council was not within the spirit of the rates cap.

“How long does the council intend to continue with this charade you’re sticking within the 1.75 per cent rate cap when in actual fact it’s going up 20 per cent,” asked Mr Stark.

Mr Headlam asked why the council did not use the differential rate to maintain the distribution of the rates take between the three categories “rather than have these big variations” (while residential and primary producer rates will increase by about 20 per cent, commercial and industrial will pay six per cent more).

“I would have thought this is what the differential rate is designed to do,” Mr Headlam said.

Mr Stark then asked why the council wasn’t adding 20 per cent to each category.

The shire’s corporate services manager, David Hol said while a number of submitters to the rating strategy talked about keeping the percentage between the categories the same, as was the case elsewhere, that was not adopted by the council.

The budget itself shows a forecast deficit of $89,000 next year, compared to a predicted $17 million surplus this year.

That difference – and the over-large surplus – is due to capital grants received this year, about $18 million more than predicted for each of the next three years. Several projects have been carried forward from this year.

The draft budget also includes money for measures that will need other government funding to progress, such as $1 million for each of the proposed basketball stadium complex and the Heywood pool upgrade, which will cost $40 million and $10 million respectively.

Councillors call for budget feedback

COUNCILLORS also had their say in the debate about the budget and the rating measures.

Michael Carr said his summary of rating strategy submissions was that “most people want to pay less than they are currently paying”.

“It’s probably well documented that the council wants to move from a rebate to a differential,” he said.

“I want to make it clear that I support the primary industries group with a 70 per cent differential.”

Cr Carr said he encouraged the community to provide its feedback on the budget.

While “things are getting tough” on the income side, with the forecast deficit, the council was coming to the end of having to fund the expensive landfill rehabilitation.

Cr Karen Stephens said the council had listened to ratepayers when deciding on the 70 per cent differential.

The budget showed the council had “very good financial management that’s been through a really tough period with the global pandemic”.

Scott Martin said this year’s budget was “another step in returning the rate category back to a differential system”.

Councillors would get a lesson in the submission process of “equality versus equality”.

“With equity we aim to take into account various factors to achieve a just outcome,” he said.

“There is a need to justify why one sector is picking up the tab for others.”

Cr Martin said prior to the rebate system farmers paid a differential rate of 80 per cent and this was changed (about 2011) “because (the) primary sector was struggling”.  

He said the budget was an open document.

“There’s no cloak and dagger stuff, it’s all right here,” he said.

He also called for the public to have their say.

“Last year we had one submission on the budget itself,” he said.

“If I can say anything… tell us what you want in the feedback please.”

Have your say

SUBMISSIONS on the draft budget are now open and can be made until 1 June, 2022.

The budget is available to read online at the YourSay Glenelg website – where submissions can also be made - and can be picked up in hard copy from any of the Glenelg Shire customer service centres.

Council staff will be visiting Casterton, Heywood and Portland to discuss the budget with residents, with the Casterton drop-in session to be held between 4.30pm and 6pm on Tuesday, 17 May.

Any submitters wanting to be heard in relation to the matter can elect to do so at a meeting on June 14, before the council votes on the final budget on June 25.