Responsible economic management vital to supporting our community

Work is under way to finalise the annual budget for the 2020/21 financial year including Council rates, with consideration of financial pressures on households due to COVID-19 being a key priority.

The City of South Perth is committed to delivering a rates freeze for the 2020/21 financial year, whilst still providing essential services, facilities and infrastructure for our local community. These include libraries, rubbish collection, sporting facilities, parks, footpaths and roads.

A rates revenue freeze means the rates collected by local governments will remain unchanged from the previous year (noting that new development growth will generate additional revenue). 

It is important to understand that there are a number of factors that impact the way individual rates are calculated. Rates are developed based on the operating requirements of the Local Government. The rates paid by individual ratepayers are a proportionate share of the costs of providing these services.

Rates are calculated by multiplying the Gross Rental Value (GRV) of a rateable property, with a rate in the dollar. The GRV (which is determined by Landgate) is the amount a property might reasonably be expected to earn if it was rented, while the rate in the dollar is the amount calculated by the City to meet its budget requirements. 

Every three years the State Government revalues properties across Perth, which can result in changes to the GRV of individual rateable properties. This year is a revaluation year. 

On average there has been an almost 14 per cent reduction in valuations across the City of South Perth area. However, some property values have increased by as much as 309 per cent and others have reduced by 40 per cent. It’s the redistribution of these valuations against each other that means an individual ratepayer’s bills could go up, go down or stay the same, even when the total rates revenue receivable by a local government have been frozen. 

Mayor Greg Milner said the GRV revaluation provides a challenge for all local governments delivering a rates freeze in this current environment.

“In March, the State Government called upon Local Governments to freeze rates and charges to lessen the impact of the coronavirus pandemic on household budgets. Like the Western Australia Local Government Association (WALGA) and a number of other Local Government Mayors, I wrote to Premier Mark McGowan to request the GRV revaluation be deferred until next financial year, to ensure that Local Governments could deliver on that “freeze” and issue rates notices for 2020/2021 that were unchanged from the 2019/2020 financial year. 

“The State Government’s decision to proceed with the revaluation has made freezing Council rates for individual households impossible. As a result, the City has committed to delivering an aggregate rates revenue freeze for the 2020/21 financial year, relative to the ratepayer base for the 2019/2020 financial year.

“The City and Council are committed to supporting and assisting our local community in managing the social and economic impact of the COVID-19 crisis both immediately and into the next financial year.

“Rates account for approximately 68% of the City’s budget to deliver essential community infrastructure, facilities and services. Other major revenue sources include, State and Federal Government funding, waste service charge and other fees and charges related to the provision of services by the City,” Mayor Milner said.

The Rate in the Dollar will be set later this month when Council considers the 2020/21 Annual Budget.