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Get the facts on rate capping

On the surface, rate capping may sound like a good idea that’s designed to save your household money.

This simply isn’t the case. 

That’s why the Local Government Association of SA (LGA of SA) has developed these resources to help you to get the facts on rate capping, and show you how this policy will cause long-term harm to you and your community as well as unfairly impact those who can least afford to pay.

We invite you to dig a little deeper to see how it will affect ratepayers and residents, more than 11,000 council jobs across the State, and thousands of volunteers and community clubs, and result in increased fees and charges.

Rate capping. It just doesn’t make community sense. Take action to stop it.

To find out how South Australian councils are part of your every day and what other services could be at risk click here.

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Maintaining jetties is a discretionary council service funded by council rates

Councils maintain and repair dozens of jetties along the South Australian coastline for the enjoyment of tourists, recreational fishers and the local community.  

Jetties are vital pieces of tourism infrastructure. They are important to many local economies and are integral to the Australian beach and coastal lifestyle.  

They are also a much loved and iconic part of the history and culture of many coastal communities. In South Australia, there are over 70 State Government jetties and wharves that are now under the care and control of councils through a lease arrangement.  

This is in addition to the many jetties and wharves that councils own. In the ten year period since 2005/06, councils collectively spent more than $6.6 million on both state and council owned jetties.  

There is no legal requirement for councils to take responsibility for jetties – they choose to deliver this service because it is important to their local community.

To find out more about how rate capping would affect your community click on the + symbol to expand the information panel below.

About jetties

The earliest jetties in South Australia were constructed in the 1850s. Jetties were essential to early settlement, with small vessels the main means of communication with many isolated communities.

There are 277,000 South Australians who enjoy fishing each year, making recreational fishing one of the most popular leisure activities in the State.

South Australia has 4,800km of coastline, in addition to lakes and the River Murray. It is estimated that there are 111 jetties currently in use.

Many SA jetties were badly damaged in severe storms in 2016. Funding provided by the State Government and local councils ensured these jetties were repaired and reopened as quickly as possible.

While there are no contemporary figures available on the economic and social value of our jetties, their importance to the tourism and recreational fishing industries are widely acknowledged.

The vast majority of boat ramps in South Australia are owned and maintained by local councils. Councils typically fund 50% or more of the costs of upgrading boat ramps across the State.

 Jetties at risk

Under rate-capping, council budgets would be squeezed to breaking point, and discretionary services that councils aren’t legally compelled to provide would be at risk. 

Therefore the jetties looked after by your local council are at risk. Councils are part of your every day – imagine life without jetties, weekend fishing and sunset walks.

What is rate capping?

On the surface rate capping may sound like a good idea. But dig a little deeper and it soon becomes apparent that it this policy will cost communities more than it will save them.

Rate capping refers to a percentage limit being placed on the amount that councils can increase their total revenue from council rates each year.

Rate capping limits councils’ ability to provide local services and puts discretionary services at risk.

It’s an empty promise – rate capping will cost you more than it saves.

For further information please visit www.lga.sa.gov.au/ratecappingfacts.

Click here to download this as a printable fact sheet.

It will affect services

The sector’s opposition to rate capping is supported by compelling evidence from interstate and overseas that demonstrates the negative impact it has had on communities where it has been introduced.

Councils invest tens of millions of dollars each year in community infrastructure and services.

Rate capping places undue pressure on councils and has been shown to affect the maintenance of public infrastructure such as roads, footpaths, sports club facilities, parks and playgrounds – shifting the burden of repair or replacement to future generations.

It has meant the discontinuation of services that contribute to building strong, vibrant communities.

It has resulted in increased council fees and charges to offset the loss of income, meaning that promised cost-of-living savings are inaccurate.

It’s an empty promise

Council rates are only a fraction of the total taxes paid by Australians – less than 4% in fact.  (The federal government collects approximately 80% of the taxes, while state governments collect about 16%.)

ABS figures from 2014/15 show that South Australian councils raise the lowest revenue per capita of any state in Australia.

While rates per capita are higher in South Australia, council fees and charges are much lower here than they are interstate.

A cap on rates would put pressure on councils to raise additional revenue through increasing fees and charges – impacting disproportionately on those who can least afford to pay.

As the closest government to communities, councils understand many South Australians are doing it tough, and offer support to households struggling to make ends meet through mandatory and discretionary rebates, remissions and postponement of rates.

It’s undemocratic

In contrast to both state and federal governments, councils are required under legislation to collect and consider feedback from ratepayers before deciding what they will include in their annual business plan, and what the associated rate increase will be.

There are examples where this process has led to postponement of planned programs and therefore a revised (lower) rate increase. There are also examples where communities have elected to increase rates to receive higher service levels or undertake major local infrastructure projects.

The introduction of rate capping will negate the purpose of consultation, putting decision making power in the hands of a state government entity that is not accountable to local communities.

It’s unwarranted

In 2015 the South Australian Economic and Finance Committee undertook an Inquiry into Local Government Rate Capping Policies. It concluded that rate capping should not be introduced in South Australia, and recommended that local councils retain full authority to set their own rates.

Local government in South Australia is supportive of sensible local government reform that will drive efficiencies without hurting communities.

It will affect you

Most people are surprised to learn that the vast majority of services provided by councils are discretionary, with very few services mandated under legislation.

Rate capping would squeeze budgets to the point where all services that are not mandatory under legislation would be at risk of being cut, reduced, or not maintained.

There is no legal requirement for councils to fund libraries, provide recreation and sporting facilities, maintain jetties, or look after parks and gardens.

They don’t have to collect hard waste, undertake street cleaning, plant or maintain street trees, facilitate community events and festivals, or protect the public through food inspections.

Councils provide services in close consultation with their communities.  Under rate capping, the conversation will change from what councils and communities can do together, to what councils will stop doing because of forced budget cuts.

Act now!

Protect your community and join the campaign to oppose rate capping. Write to your local MP or candidate now.

 

 

 

 

 

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