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Differential Council Rates for Vacant Land

John Darley, Advance SA (5AA 11.06-11.17)

(Byner: We get so many people who call us on issues of taxes … council rates and the way things are calculated, the councils on the other hand argue well, people are demanding more services and in order to provide those we have to charge more. … blocks of eastern suburbs land left vacant and some say, turn into doormat dustbowls, are going to cop a big financial hit from the Burnside Council. … there was a meeting of the Burnside Council recently and there was a push by the administration to increase commercial rates by 50% … if they bothered to talk to people who run businesses … they want something for their family, for their children. That seems to be a problem for some. … Burnside are going to increase the rate in the dollar for vacant land to 200% higher than the residential rate … let’s talk to Advance SA’s John Darley … what do you say?)

Well all, there are about 20 metropolitan councils and Burnside is the last one that … to introduce differential rate onto vacant land. It’s based on the theory that if you increase the rate … on vacant land, it will encourage people to build on it. Now that is absolute nonsense, all other councils in the metropolitan area and a lot of the country councils, already charge a differential rate on vacant land. This is particularly critical in the fringe areas where you’ve got young people who want to buy a block of land, so they save up to buy the block, then they get belted by councils, double the council rates generally speaking … that impacts on their ability to save up to build a house. So the whole thing is quite wrong. … they then belt the owners with a differential rate which can be up to 100% higher than the residential rate, I mean it’s just a money grabbing exercise. The other thing is with Burnside, they don't charge a differential rate for commercial industrial whereas all other councils do and if they’re considering doing that with the commercial people, the commercial owners are providing the employment, so why belt them, it’s just a cash grab.

(Byner: What do you want to do about it?)

… I put up some legislation that said look, I’m quite happy to go along with a differential rate on vacant residential blocks of land, but not until the block of land has been in the same ownership for three years, in other words, they get a rent holiday in terms of differential rate if they bought a block for three years they wouldn’t pay the differential rate, but after that they would. Would you believe the major parties opposed it.

(Byner: On what basis?)

It wasn’t on the basis of common sense I can tell you that.

(Byner: What was it on the basis of?)

Who knows, who knows … if you increase the rates based on a differential rate, well that increases the price of the land … The Masters Builders couldn’t understand what their logic was.

(Byner: … Council to which we refer have admitted in a report that the rise could potentially be hard to justify and would in fact be a disincentive to development. So if they’re on one hand telling us that we’ll put this price up to advantage development or encourage it, but we acknowledge that it probably wont, that’s a sham.)

It’s crazy, it’s just a cash grab, that’s all it is.

(Byner: So what can be done, because remember we’ve got the current Government who went to the people on a rate cap, we know that’s dead and buried … so where to from here …)

… all the independent members in the Upper House agreed with it, but the major parties opposed it and so we lost.

(Byner: You went to an LGA meeting yesterday, what happened?)

Oh not a lot really … there is a problem as we know with recycled waste … a lot of what we call recyclables, there’s not market for it, there’s a market for the drink cans and bottles … what seemed to be a big issue was that in the metropolitan Adelaide, the problem we’ve got is that we’ve got two sets of waste bins … probably half the metropolitan councils have a red bin for waste, a yellow bin for recyclables and a green bin for vegetation material. The other ones have got a blue bin for waste and the issues was, how do we get the councils all to be consistent. Now the Chief Executive of Green Waste, he said that they’d had a look at this and it would cost $7m to change either the red bins to blue or the blue bins to red and I said well, if it’s, I don't know how you work out it’s $7m, but I would have thought you’d total up for each council where the majority of bins were, that were either red or blue, make a decision … change the lids, because you only have to change the lids.

(Byner: Now Davis Speirs was on this show a couple of days ago … he made the point that councils went down the path of trying to make money out of their waste … he said you guys made a decision … it’s now backfired on you, I’ll be blowed if I’m going to use tax payers money and help you out, what do you say to that.)

I’d agree with that, I think it’s up to the councils to try and work out or encourage entrepreneurs to develop processes where you can use the waste … how we can use this waste to better advantage and encourage those people, not just throw up your hands in horror and then look to the Government for $12m to offset the loss …

(Byner: John Darley thank you for joining us today.)