SWAN Hill Rural City Council elected members have unanimously rejected the State Government’s proposal to exempt social housing owned and operated by Homes Victoria and other community housing providers, from paying rates for local services.
Councillors who spoke against the proposal said that they supported social housing, and knew it was a critical issue in the Swan Hill local government area – however, they wanted the State Government to pay the rates on the social housing they owned, rather than have the economic shortfall, estimated to be over $500,000, covered by ratepayers.
The Swan Hill Rural City Council is currently working with The Municipal Association of Victoria (MAV) to create a Local Government Strategic Statement ahead of state councils’ discussions with the State Government about social housing.
A key element of the MAV’s Local Government Strategic Statement is the State Government’s proposal to exempt more than 85,000 social housing sites owned and operated by Homes Victoria and other community providers from paying rates for local services, which will cost Victorian councils over $136.7 million per year.
In the Swan Hill LGA there are 437 social housing sites owned by the Department of Families Fairness and Housing, which would equate to over $500,000 per annum in lost revenue from rates.
These lost rates would cost the council $5.5 million over a 10-year period.
Across the state, approximately one billion in revenue would be lost from councils in the same timeframe.
In addition to shifting the economic burden onto ratepayers, elected members and staff were concerned that the proposal would curtail council’s services expenditure.
“So, what you’re saying is effectively, the State Government can say this social housing is rate-free, and there’s not a damn thing we can do other than this advocacy to oppose that?” Cr Stuart King asked director development planning Heather Green, who was the officer responsible for the agenda item.
“The proposal is to legislate for that to occur – and they (MAV) are looking at a shared State Government-Local Government compact, which is some sort of agreement about how we will manage social housing, which we haven’t received yet,” Ms Green said.
“I’m assuming that they (the State Government) are aiming to legislate that we no longer rate those premises (social houses) like we don’t rate churches.”
Cr Stuart King then asked Ms Green if there had been any talk from State Government to Local Government of compensation as a result of this legislation.
“No,” Ms Green said.
In response to a question about how social housing rates currently work from Cr Ann Young, Ms Green said the State Government currently pay the rates on houses they own, and community providers such as Haven Homes pay rates on houses they own.
“Like any property owner they pay the rates, and the tenant pays the rent,” Ms Green said.
Director of corporate services Joel Lieschke said that with this proposal, the State Government were looking to “avoid” having to pay the council the $500,000 in rates.
Under the legislation, private and community housing providers would also be exempt from rates, and could increase the cost estimates by 30-50 per cent in the region.
“I think it’s the State Government’s way of ensuring councils contributing to social housing, through a loss of rates,” Ms Green said.
Cr Nicole McKay asked if this was a standard practice in other states, and was told ‘No’ by Ms Green.
“Does this include things like the garbage bin levy, the recycle bin levy, or would it be purely in property rates?” Cr King asked.
“I don’t know about that, but it wouldn’t include the fire levy,” Ms Green said.
“It’s not clear at the moment.”
“Ms Green, will the reality be, that subject to rate capping, that council will not collect any more in rates (from social housing), and that this cost will fall onto other ratepayers?” Deputy Mayor Bill Moar asked.
“We will still get the same dollar amount with the rate capping, but the shared burden, that will fall onto other ratepayers?”
“I guess it’s council’s decision to make at the end of the day – to forego that $500,000 a year and just keep collecting rates, or you can spread it across other ratepayers to collect the $500,000,” Ms Green said.
“If we don’t make the $500,000, will we need to cut staff, or the services we provide?” Cr Moar asked.
“Less roads, less maintenance?”
“Yes, that’s the reality,” Ms Green said.
Mayor Jade Benham moved the motion to support MAV in its advocacy program in relation to the proposal, and advocate to all local members of parliament and relevant ministers in relation to the proposal to exempt social housing dwellings from the need to pay rates for local services.
She was seconded by councillor Les McPhee.
“Losing half a million dollars each year that other ratepayers will no doubt have to make up, for community services, seems to be another attempt by the State Government to cost-shift something onto local governments who can’t afford it,” Mayor Benham said.
“I’m all for social housing and we certainly need more of it – just not at this cost.”
Cr McPhee agreed that it was cost-shifting by the State Government.
“Nobody isn’t saying that we don’t need affordable social housing, we definitely do, but it shouldn’t come at the expense of other ratepayers,” Cr McPhee said.
“This is a job that the State Government should be doing.
“Only recently we’ve seen them cost-shifting through rate capping.
“We shouldn’t cop it again – it’s just another kick in the butt.”
Cr Jeffery said that every other state government agency paid rates, and social housing, while needed, shouldn’t be exempt from it.
All those in favour of the motion to advocate against the proposed legislation passed unanimously.
