WALGA requires crackdown on price exemptions impacting Local Governments | USAEMALL.com

Local councils claim they’re being robbed of hundreds of thousands of dollars every year due to a loophole allowing some not-for-profits to avoid paying rates.

They say it means they can’t provide services like libraries, bin collection and road works that the growing population expects.

The WA Local Government Association claims some organisations were cashing in on a measure meant for genuine charities, at the expense of other ratepayers.

It argues current interpretation of the rules around what counts as a charitable organisation is too broad, allowing for not-for-profits with commercial arms to cash in on the exemptions.

WALGA president Karen Chappel cited assisting-living facilities as among the most commonly used exemption

The submission calls for $200,000 in the next State Budget to go towards an independent organisation to undertake a broad review of rating exemptions.

Ms Chappel said she did not want the charity exemption to be taken away completely, but changed so it was working as originally intended.

“They’re taking the opportunity that’s available to them,” she said. “If there is an opportunity to have an exemption, of course a charitable organisation will take it.

“It’s about whether a commercial arm of a charitable organisation should be eligible. (That) is probably the question.”

The body’s submission also noted the widening of exemptions for “miscellaneous” licenses, which includes mining companies.

It said the State Government’s decision was made without consultation with the Local Government sector, and directly contradicted a previous ruling by the Supreme Court of WA.

“While a robust and competitive resources sector is vital to the State’s economic prosperity, it must not come at the expense of regional communities,” it said.

Ms Chappel predicted the lost revenue across all exemptions would spill into the hundreds of thousands.

“Local governments provide services and infrastructure for everybody in our community,” she said.

“When you’ve got one section of your community having an exemption, those that are actually paying rates, they’re supporting the other section of the community.

“It’s about the exemptions being justifiable and fair and I think that’s what we’re asking for. We would like this review to take place so that it seems to be fair.”

A Government spokesperson said Local Government Minister Hannah Beazley had met several times with the sector.

“Over the past year, the Minister for Local Government has met with WALGA and a broad cross-section of stakeholders within the sector, including elected members, senior staff and industry representatives, to discuss a number of matters facing local governments, including rates,” she said.

“Additionally, there has been significant discussions and conversations about the future direction and sustainability of local governments.

“The Minister greatly values the large amount of feedback that has been provided across the sector, stakeholders and from community members and this will be considered as part of any future local government reforms.

“The Cook Labor Government acted quickly to provide certainty for both the sector and industry by introducing a Bill to restore the longstanding policy intent that Crown land held under miscellaneous licences or small prospecting licences are not subject to rating.”