West Daly Regional Council warns 57 per cent of its rates base could vanish under proposed reform
A remote NT council says it could be stripped of up to 57 per cent of its rates base if the government forges ahead with a proposal to ban the rating of charitable land under all but the rarest of circumstances.
Northern Territory
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A remote NT council says it could be stripped of up to 57 per cent of its rates base if the government forges ahead with a proposal to ban the rating of charitable land under all but the rarest of circumstances.
The local government sector has increasing concerns about a proposal to amend a section of the Local Government Act, which is being driven by Local Government Minister Chansey Paech.
It’s understood Darwin Lord Mayor Kon Vatskalis has written to Mr Paech on behalf of all Local Government Association of the Northern Territory-affiliated councils, expressing the sector’s misgivings.
The provision in question exempts charities registered with the regulator, ACNC, from paying rates but the exemption only applies when the land is used for a “non-commercial purpose”.
The NT News understands that some councils are rating charities in circumstances where they view the activities being undertaken as substantially commercial in nature, such as a multicultural club hosting frequent functions, parties and events.
The amendment canvassed by Mr Paech – which he foreshadowed in a letter sent late last year to all Territory councils – would change the provision so that charitable land could be rated only when it was used entirely for a commercial purpose.
Mr Paech gave an edict to councils that the application of rates to charitable land “must be ceased immediately”.
He said he had received numerous complaints from charities who were previously not rated, but had recently received a notice in the mail.
Ralph Narburup, the mayor of West Daly Regional Council, urged Mr Paech in a letter sent on January 2, not to press ahead with the reform – warning it would financially cripple his council – which had an income of $13,846,210 in 2022–23, most of which was from grants.
“West Daly Regional Council’s ability to maintain its finances and provide local government services would deteriorate with significant reduction in rates revenue,” Mr Narburup wrote.
“Examining the effects of a proposed legislative change reveals that [the council] would suffer nearly $1m decrease in rates revenue, a terrible loss.”
Mr Narburup said that, if the provision of public housing in Wadeye, with a population of approximately 2000, was given over to a community housing provider – which would be captured by Mr Paech’s new, broader exemption for charities – then the annual loss to the council’s rates base would rise to more than $1.7m.
This represents 57 per cent of West Daly’s current rates base, Mr Narburup claimed.
He also noted that an investigation by council officers had unearthed no charities in the West Daly that had voiced their concerns about the current scheme.
A local government source told the NT News that if the government was so concerned about rates threatening the viability of Territorian charities, then perhaps it should look at its own exemptions.
“Do they charge them for power and water?” the source asked.
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