Rates cap could have ‘devastating impact’: Shire

Shire of Broome president Graeme Campbell has warned that any potential State Government directive to keep inflation busting rate hikes to a minimum could have a devastating impact on the Kimberley town.

His call comes after Local Government Minister Tony Simpson put WA councils on notice by saying big increases could not continue and that they faced scrutiny from the State’s economic watchdog.

In his speech to the WA Local Government Association annual meeting last week, Mr Simpson revealed he had asked his department to start a “dialogue” with the sector to look at how to keep rate rises to a minimum.

He said “arbitrary rate caps” were not his intention. One option he proposed was bringing oversight of rate setting under the control of the Economic Regulation Authority, which would scrutinise rate rises and determine whether they were justified.

Despite Shire of Broome rates rocketing by more than 61 per cent since 2007/08, Mr Campbell said efforts to control the revenue stream would put unacceptable pressure on council staffing and services.

In February this year, the authority made 15 people redundant in an effort to hold a proposed rate increase at 3.97 per cent this financial year.

Following a meeting with the Grants Commission in Perth last week, Mr Campbell said it was likely the council would miss out on about $400,000 of Federal funding next year because of the “depth and breadth” of its rate base.

“That alone equates to a potential rates increase of two per cent,” he said.

“If these rates were capped it would mean we would need to look at our efficiencies, we would need to look at our expenditures, and we would need to look at what services we provide.

“The Broome community would already be aware of the redundancies that occurred earlier this year and I hate to think we would go down that path in the future but it could occur in terms of service delivery if the State does cap the rates.”

Mr Campbell said the opportunity of raising fees was not broad because many council charges were already capped under legislation.

Mr Simpson also flagged plans to make councillor training mandatory and extend the Auditor-General’s auditing powers to include local government.

It was revealed last month that rates were rising twice as fast as inflation in nearly a quarter of Perth councils. Treasury has projected a 2.25 per cent Perth consumer price index rise for 2015-16 and the national inflation rate is forecast at 2.5 per cent.

The Shire of Broome last month revealed its budget would go into deficit of about $60,000 in 2015/16 because of continued rate concessions to 129 out-of-town property owners at Coconut Well (48%), 12 Mile (27%) and horticultural land use (11%).