Local Government Bill: Councils' Obligation to Compare Its Rating Policy With Others

Debate on the Local Government package of Bills. i.e.

Local Government Bill 1999,
Local Government (Elections) Bill 1999,
Statutes Repeal and Amendment Bill (Local Government) 1999

took place in the Legislative Council over two weeks: from 27 July to 5 August 1999. For ease of reference on the Democrats web site the debates have been separated into individual pages, each page containing an edited transcript of only one aspect of the total package.

This page covers only the Democrats amendment which sought to remove a time-consuming and expensive obligation to compare its rating policy with those of other councils. For an index of other topics covered in the Local Government Bills, see the Democrats Local Government page, or the 1999 Budget Session Index

I believe that the amendments to lines 19, 21 and 24 are all connected with the intention of this amendment to remove the obligation of councils to undergo this comparative council rating process, which they were dreading. I think there will be great sighs of relief across the local government community to hear that the Government supports the Democrats' amendments and that they will no longer be required to comply with the rather onerous, enormously time consuming method required in order to reflect the consideration of issues of consistency and comparability across council areas in the imposition of rates on various sectors of the business and wider community. I am very pleased to hear that these amendments appear to have the numbers.

The Hon. DIANA LAIDLAW: I accept the amendment. However, I do not accept the other amendments.

The Hon. DIANA LAIDLAW: The Government vigorously opposes the amendment moved by the Hon. Mr Gilfillan to the second part of line 19. The intention of the clause is to require councils to look beyond their own area, consider relevant comparisons and justify the level and impact of their rating structure. The provision does not require all councils to have the same rates. That has never been suggested, it is not the Government's intention, and it is certainly not provided for in the Bill. The Bill merely requires councils to think about these issues in a broader context.

The Bill also aims to address commonly expressed concerns from businesses and other ratepayers when they query why rates for a particular type or value of property can vary so markedly between council areas. All members of Parliament would have this matter drawn to their attention from time to time—why a business in the same line of practice and maybe bordering a council boundary would have such dramatically different rates? If councils look beyond their area and consider issues that are broader than those that apply just within their own area, the procedure will be more transparent in terms of the way in which rates are considered in this State, and it will certainly answer many queries from businesses across boundaries in the future. It would be better practice overall.

The Hon. IAN GILFILLAN: An opinion is held not just by me but by the LGA and the rate assessors regarding the obligation under the Bill that a council must, for each financial year, adopt a rating policy, and that the rating policy must indicate the relationship between a council's strategic management plans, its budgets and its rate structure. That is okay. It must also reflect its consideration of issues of consistency and comparability across council areas—arguably the whole State—in the imposition of rates on various sectors of the business and wider community. That will require an enormous amount of work and research, because each council will vary from year to year, which means that each council will have to update the data of every other council. To what purpose? For one thing, there is no guarantee that there are directly comparable sets of data.

There will be a quite wide divergence between the criteria that will evolve with different councils. Apart from the academic exercise of having a vast amount of paper or Internet material—which only a very rare breed of student would even bother to look at—it would have absolutely no practical purpose and it would be an enormous cost and a drain on the time of the staff of the council. It is a pointless measure, and I hope that the Committee will support my amendment.

The Hon. DIANA LAIDLAW: I have a bright idea— `adjoining council areas'. That is essentially what we mean, rather than `across country areas'. The Adelaide City Council is a prime example. It has to, and if it did not I would be aghast as a ratepayer—and I declare an interest. If it did not have some idea of what was happening across its boundary areas to business rates and the like, it would not be diligent in its duty in setting the rates for business to attract business back to the city. It is only sound common practice, and it would do it without us requiring that it do it. Maybe it does not and we should be comfortable that they are.

The Hon. DIANA LAIDLAW: No, you would hope it would, but why should we believe that the Adelaide City Council would—

The Hon. DIANA LAIDLAW: But why should you believe that the Adelaide City Council would do so?

The Hon. A.J. REDFORD: `Adjoining' will not work. To give an example, if you have `adjoining' you have Mount Gambier Council comparing its rates with Grant Council—they are two totally different councils with totally different rating systems and totally different demands. That will not be of any use to anybody either. Let the honourable member move something that is different from the Lower House and we will pick it up between now and next Tuesday when we have time to think about it. If we try to do it now on the run we will never get it right.

The Hon. IAN GILFILLAN: I appreciate the efforts at helpfulness by the Minister but, frankly, if there is a sense of responsibility by a council to achieve its best results both for its own motivation and for pressure from constituents like the Minister, they will want to compare and assess performances, and that will be taken as a very sensible part of the consideration in the policy. As it is drafted in the Bill, it is a `must'. It is actually an injunction that the council `must', and I do not believe that is appropriate.

The Hon. T.G. CAMERON: The Hon. Ian Gilfillan is drawing a very long bow if he argues that the wording in the current Act requires councils to check rating policies, and so on, right across the State. Councils are not staffed by complete morons. One would have thought that they would look at councils in their area or in their vicinity and compare like with like.

The Hon. T.G. CAMERON: I am not quite sure what the Hon. Angus Redford is referring to. I think the honourable member draws a long bow when he argues that the wording in the clause means that the councils must look at all councils in the State and make relevant comparisons. I cannot see that in the clause.

The Hon. T.G. ROBERTS: There is no penalty if they do not. We will join with the Government in this. I think there will be a practical realisation for those people servicing their councils to come up with a reasonable application of the clause.

The Hon. IAN GILFILLAN: I am not happy to see this so glibly drifted through. There has been no explanation from anyone of a meaning for the words `across council areas' other than the expectation that that embraces council areas in the State of South Australia. It is not defined; it is not restricted; it has no qualifying aspects to it. If a dutiful council is to comply with the injunction of this Act, it is obliged each year in its policy to reflect its considerations of issues of consistency and comparability across every council in South Australia. There is no other grammatical interpretation. There may be wishes and understandings and may be it will be better and may be it will be changed in practical effect.

My amendment would put in proper wording what I understand the Hon. Terry Cameron and both the Government and the Opposition would like to have: that the council is obliged only to do the assessment in its own area. If it is not the case that it be other than its own area, then the Bill should be more specific; that it may be one or two other councils of similar character. What are the adjoining councils for Kangaroo Island? It is a shame on this Committee if we slip this through with the naive hope that somewhere this will be tidied up.

The Hon. IAN GILFILLAN: No, my amendment is quite clear. It means that paragraph (b) would apply only to the area of the council itself. Subclause (2) would provide:

(b) reflect its consideration of issues of consistency and comparability across its area in the imposition of rates—

That seems to be a reasonable requirement of a council. Anything other than that means that the council will be obliged to do the consideration of other councils.

The Hon. T.G. Cameron: Neighbours and other people are doing it. That doesn't mean that they have to exhaustively analyse every council's rating process.

The Hon. IAN GILFILLAN: If the Hon. Terry Cameron wants it to be neighbours, it should be amended to read `neighbouring councils'. We are here to construct legislation that is intelligible, interpretable and accurate. If no-one here knows what the meaning of council areas is—

The Hon. IAN GILFILLAN: I would like someone to explain it to me. I beg the Minister to let someone else who supports the Government's position—either the Hon. Terry Roberts or the Hon. Terry Cameron—to explain to me what they understand by the meaning of the words `council areas'.

The Hon. R.R. ROBERTS: What we are really talking about is a question of due diligence for councils in adjoining areas to avoid community disruption. A council should exercise due diligence in looking at what an abutting council does. The boundary line between two councils could embrace land of similar use, so if on one side a property is rated at $100 a year and a similar property on the other side is rated at $200 a year, there would be disruption between the communities. They would not be worried about the boundary line. It is a question of due diligence for councils to make a sensible assessment of rates in those areas so that is avoided. The Minister put a sensible proposition 15 to 20 minutes ago to refer to adjoining or abutting councils. It requires due diligence. I do not think that there is a huge penalty if they do not do it but there is a requirement that they provide due diligence. I would have thought that was a sensible thing to do.

The Hon. DIANA LAIDLAW: It is getting late and that can be the only justification for the quality of the debate, but that is not a reflection on the contribution of the Hon. Mr Roberts, which I appreciated because of its commonsense.

The Hon. DIANA LAIDLAW: You. There are 21 of us arguing against you. The honourable member is well outnumbered. Everyone understands that, when you make policy decisions, you deal with numbers in general terms. No penalty is required here. I would have thought it was good practice and, under this Bill, we are asking councils to exercise good practice in terms of preparing and publishing a policy for their constituents. If I had a business, Adelaide City Council could tell me that it had considered rating in Unley, Prospect or Walkerville. Why would it not do so and put up something five times higher and lose most of the businesses in Adelaide? We are putting good practice into this Bill. What is happening at Paringa is not relevant to the Adelaide City Council. It would not waste its time on it and nor would we ask it. I do not think that we should spend more time on this provision.

The Hon. IAN GILFILLAN: Can the Minister explain what she means by the words `council areas'?

The Hon. IAN GILFILLAN: It might be appropriate in calmer times and more tranquil waters to put in at least the words `relevant council areas' because, with due respect to the Minister, as it is currently drafted it does not oblige a council to do what she would like it to do, and the wording should be framed to have some intelligence.

The Hon. DIANA LAIDLAW: I have always been a reasonable, accommodating individual. Although I do not know why I should, I suggest that I amend the measure, as follows:

The Hon. IAN GILFILLAN: I am not sure that I would even qualify this as a compromise. I think it is quite a reasonable wording and gives some sense to the paragraph. It will be up to a council pretty much to determine the relevance, and I think that is a sensible rewording of that paragraph, and therefore I seek leave to withdraw my amendment to page 129, line 19.

The Hon. DIANA LAIDLAW: The Government will accept the Hon. Mr Gilfillan's other two amendments.

	Extract from Hansard Legislative Council 29 July 1999

Ian Gilfillan Australian Democrats Member of the Legislative Council		Parliament Index 1999 Budget Session Index Browse by Subject About the SA Parliament Hansard on line