The great rate debate
How often do we hear the cry “Orange rates are too high!” Whatever side of the argument you sit on, probably no one will ever be able to convince you otherwise. Be that as it may, we thought we’d ask a few people who know a bit more than us about rates to gives us their thoughts. It will be interesting to see if what they say changes any local thinking.
Rates too high? Tell us where to cut, Councillors say
Are Orange City Council’s rates too high? Then, Councillor Joanne McRae says, tell Council what services should be cut and where.
Whether Orange ratepayers are being unfairly-slugged by its Council is a matter of point-of-view and depending who you talk to.
Both Cr Tony Mileto and Cr McRae don’t believe we are, saying that Orange residents have a range of services not enjoyed by other towns.
Colin Young from Orange Residents and Ratepayers Association says however, that, yes, we do in fact pay high rates with Council utilising a range of accounting tricks to effectively raise rates under the cover of water and sewer contributions.
Cr McRae believes though that it is virtually impossible to compare rates from one town to the next because the burden of services provided by each Council area vary so much. “Everyone in NSW believes that they pay too much in rates,” she added.
Resident and ratepayers expectations of what Local Government can and should do has also expanded over the years at the same time that cost and responsibility shifting from State and Federal Governments has increased.
“I think our rates are appropriate and responsible for the services we provide… If you want lower rates; what do you want us not to do?” she asked.
“Sometimes people compare us to Sydney-based councils, but these councils don’t run an airport, don’t run cemeteries, childcare, and are not even responsible for water, “she explained.
She says that Orange also carries a financial burden as a draw-centre for residents from outside the city. “Blayney residents get the benefit of the airport, but Orange Council pays for that,” she said.
“We actually have 55,000 people in Orange per day, that’s an extra 10,000 additional people using our roads, pool, library.
“So, in effect one in five local government service-users are being subsidised by the other four. There are costs to that,” she said.
She says that rate-capping by the State Government for a number of years means that Councils cannot increase general rates above an inflationary-adjusted figure set by the Independent Pricing and Regulatory Tribunal without asking for a “special rate variation”.
“Orange Council has not applied for a special rate variation for a number of years,” Cr McRae said.
“Our budget went on exhibition and we had a huge number of requests to fund play equipment in Wentworth Estate (in west Orange), but no-one said to cut spending… nobody ever asks Council to stop doing anything.”
She said that councils are being squeezed two ways; from increasing expectations on what the role of local government should be outside of their traditional role as service provider for “rates, roads and rubbish” and to increasing cost-shifting by State and Federal Governments.
She points to changes to the Companion Animals Act with Orange Council now required to build a new Council pound after being unable to find a private contractor to take on the role as an indicator of the added burdens on Council.
Councillor Tony Mileto says that, while Orange Council does have high rates, comparisons are not as black-and-white as they might seem.
“The Office of Local Government compares rates across the State. The latest figures are for 2016/17 and this has our average residential rate in the top 15 councils across the State,” Cr Mileto said.
“So, we’re up there, but we’re not the highest.”
Cr Mileto agrees with Cr McRae that like-for-like comparisons are not simple: “When looking at council rates, it’s important to compare apples with apples.”
“Councils across the State are very different in their population base, the area they cover, the amount of roads they have, the depth and quality of community services they provide… it’s about value.
“Are they getting something worthwhile for the money they pay in rates? Then it’s a matter of how they’re experiencing what Council provides.
“Do they go to the theatre/library/pool/airport/council childcare/parks/sportsgrounds and, if so, do they perceive Council is involved in providing those services, or do they ‘just happen’?
“The quality of Orange’s (Council-provided) water might be invisible to them. They might never see the quality of Orange’s sewage disposal system. Waste collection and recycling mightn’t matter to them.”
He adds that Orange’ Council’s high-investment strategy in local infrastructure also has a cost: “There is significant Economic Development occurring in Orange at the present time, which requires a high level of infrastructure.”
“In simple terms; if ratepayers like what Council does, they think they’re getting value for money. If they’re angry with Council, they think rates are too high,” he concluded.
Colin Young from Orange Residents and Ratepayers Association says however, that, yes, we are a highly rate-charged residential community with increasing water and sewer levies used to bolster Council’s books.
“If you compare us to comparable local government areas; Tamworth, Albury, Wagga, Dubbo and Bathurst, we certainly have rates high in comparison to those towns,” Mr Young said.
He believes that while Council can say “We only increased general rates by so much,” heavy increases in recent years in water and sewerage charges are being used to bolster Council’s financial reserves.
“They’ve got $160 million in the bank, but we have quite a large slab of that in less than rolled-gold rated investments.”
He said that although water and sewerage charges must be used only for those services, “interest earned can be used for anything.”
Mr Young said that the reason why some councils are better run financially than others “comes down to good management.”
“Good management is able to keep the cost down on projects that are of benefit to the town.”
He said also that the lack of incentives for good-quality candidates means that there are only a limited number of suitably-qualified people who want to run for Council.
“Being a good councillor is such a huge impost on councillors. Very few can understand the business aspects of good management,” he opined.
“We have a crying need for really good candidates, we need more women who are prepared to come forward.
“Too many councillors can get tangled-up with ‘how many strands of wire in the fence for Council approvals‘ sort of questions. We need good people to represent themselves as good candidates,” Mr Young concluded.