Local government NT: Chansey Paech says he won’t broaden charity exemption from rates

Local Government Minister Chansey Paech has backed down from moves to almost totally exempt registered charities from paying rates. Read what it will mean.

Deputy Chief Minister Chansey Paech, who is the Minister for Local Government. Picture: Pema Tamang Pakhrin

The Northern Territory government has backed down from moves to broaden the exemption charities receive from the application of rates on their land, following a concerted campaign from local governments worried about shrinking rates bases.

Local Government Association of the Northern Territory acting chief executive Mary Watson said Local Government Minister Chansey Paech’s concession that more groundwork needed to be laid was a “good win”.

“But we think its not necessarily a permanent one, that’s probably our concern,” she said.

Ms Watson said the association’s position was that the onus should be on the charity to prove financial hardship, rather than be exempt from rates under all but the rarest of circumstances, as proposed by Mr Paech last November.

She said the association had requested the Local Government Unit within the Department of Chief Minister and Cabinet tighten the provision that has been responsible for the dispute, s222(1)(g).

That section holds that charitable land is exempt from rates as long as the land is “used for a non-commercial purpose,” a wording that has led to the inconsistent application of rates, as some councils have taken different views of what a non-commercial purpose is.

Under the reform previously flagged by Mr Paech, that section would be changed to broaden the exemption, making it clear that charitable land was not to be rated unless it was used exclusively for a commercial purpose.

LGANT Acting CEO Mary Watson. Picture: LinkedIn

Mr Paech wrote to mayors in a letter dated February 12 conceding more groundwork needed to be laid before pressing ahead with the proposed reform.

“It is clear … there is still work to be done before legislative change is warranted,” Mr Paech said.

“I understand many of the affected charities … are working through rates concessions with relevant councils directly, and I am also aware there is at least one current matter before the Northern Territory Civil and Administrative Tribunal regarding the applicability of the exemption.

The local government sector is deeply concerned about what its rates base would look like if community housing providers were exempted from paying rates. Picture Mark Brake

“In light of this, the Northern Territory government will not be proceeding with any amendment to the act in this term.”

The Local Government Unit within the Department of Chief Minister and Cabinet would “continue to explore potential policy alternatives,” Mr Paech said.

The sector remains deeply concerned about the possibility of community housing providers, who are classified as a charity under the Local Government Act, securing for themselves total rates exemptions.

West Daly Regional Council mayor Ralph Narburup, in his submission on Mr Paech’s proposed reform, said that if all charitable land became exempt from paying rates, and community housing providers were covered by that broadened exemption, his local government area stood to lose 57 per cent of its rates base.

Ms Watson said she understood a community housing provider had already commenced proceedings in the Northern Territory Civil and Administrative Tribunal against its relevant local government, seeking a rates notice be overturned.