Published Wednesday, 18 June, 2008 at 05:23 PM
Minister for Main Roads and Local Government
The Honourable Warren Pitt
Don’t use council amalgamations as excuse for rate rises: Pitt
Local Government Minister Warren Pitt says he is concerned that the recent mergers of local councils could be used as a smokescreen to justify rate increases.
Mr Pitt said ratepayers in amalgamated council areas needed to be aware that the mergers should not result in rate increases.
“I am concerned by some of the reports I am hearing about rate increases being necessary because of the council mergers,” Mr Pitt said.
“There is no need at all for this to happen. It would be completely unjustified.
“If anything, ratepayers should be asking if they will receive a rates rebate.
Mr Pitt said he would be writing to the Local Government Association of Queensland over their reported comments that councils could be forced to increase rates by double digits partly because of amalgamations.
“This really is getting to the ridiculous stage. There has been quite a lot of nonsense sprouted about the costs resulting from council mergers. Most of the cost estimates wither and wilt under the merest scrutiny,” Mr Pitt said.
“There is absolutely no justification for councils to raise rates to cover amalgamation costs.
“The State Government has provided councils with $27.1 million – more than what the LGAQ asked for – to assist with amalgamation costs.
“We have also introduced legislation to give councils in amalgamated areas four years to align their rating systems.
“We believe this is adequate, but if it isn’t the government has invited councils to submit details of the extra costs they claim are associated with their being amalgamated.
“To date, I have not received one formal submission.
“Of course, we have asked councils to include in any submission their estimates of the savings they will make as a result of being part of a larger council – the savings that will be available to them each and every year from operational efficiencies and economies of scale.
“We have seen in other states that amalgamation has resulted in a two to three per cent recurrent annual saving.
“In our larger regional councils, two to three per cent of an annual budget equates to millions of dollars, so I’ll be particularly interested to check that they include these savings as part of any submission they may put forward.”
Mr Pitt said most, if not all, councils faced the prospect of having to increase rates to address the current challenging economic situation and rising construction and fuel costs.
“Already we have seen some non-amalgamated local governments make the difficult decision to introduce significant rates rises, most notably in Brisbane, where the average rise is nine per cent, and in Redland City, where the average is 11 per cent,” he said.
“Amalgamation cannot be blamed for these increases and it would be irresponsible for other councils to use the local government reform process as a scapegoat for rate rises.”
Media contact: Minister Pitt’s Office 3227 8819
Mr Pitt said ratepayers in amalgamated council areas needed to be aware that the mergers should not result in rate increases.
“I am concerned by some of the reports I am hearing about rate increases being necessary because of the council mergers,” Mr Pitt said.
“There is no need at all for this to happen. It would be completely unjustified.
“If anything, ratepayers should be asking if they will receive a rates rebate.
Mr Pitt said he would be writing to the Local Government Association of Queensland over their reported comments that councils could be forced to increase rates by double digits partly because of amalgamations.
“This really is getting to the ridiculous stage. There has been quite a lot of nonsense sprouted about the costs resulting from council mergers. Most of the cost estimates wither and wilt under the merest scrutiny,” Mr Pitt said.
“There is absolutely no justification for councils to raise rates to cover amalgamation costs.
“The State Government has provided councils with $27.1 million – more than what the LGAQ asked for – to assist with amalgamation costs.
“We have also introduced legislation to give councils in amalgamated areas four years to align their rating systems.
“We believe this is adequate, but if it isn’t the government has invited councils to submit details of the extra costs they claim are associated with their being amalgamated.
“To date, I have not received one formal submission.
“Of course, we have asked councils to include in any submission their estimates of the savings they will make as a result of being part of a larger council – the savings that will be available to them each and every year from operational efficiencies and economies of scale.
“We have seen in other states that amalgamation has resulted in a two to three per cent recurrent annual saving.
“In our larger regional councils, two to three per cent of an annual budget equates to millions of dollars, so I’ll be particularly interested to check that they include these savings as part of any submission they may put forward.”
Mr Pitt said most, if not all, councils faced the prospect of having to increase rates to address the current challenging economic situation and rising construction and fuel costs.
“Already we have seen some non-amalgamated local governments make the difficult decision to introduce significant rates rises, most notably in Brisbane, where the average rise is nine per cent, and in Redland City, where the average is 11 per cent,” he said.
“Amalgamation cannot be blamed for these increases and it would be irresponsible for other councils to use the local government reform process as a scapegoat for rate rises.”
Media contact: Minister Pitt’s Office 3227 8819