Over a hundred years ago a benevolent government exempted churches and religious organizations, charities, schools and government instrumentalities from having to pay council rates.
Today, the rates burden falls disproportionally on Mum and Dad homeowners - and specially on those trying to earn a living running a business. In some areas, seventy percent of council rate income comes from the rates levied on the business community.
The rate for home owners is pegged and balanced against inflation, but even so the average family is providing the money for the bulk of council services and many of the people exempt under this legislation are really commercial operations.
Pity the council with a vast tract of Housing Commission homes within it's boundaries. The Housing Commission is exempt from council rates even though it charges rent for those dwellings - and it's tenants enjoy the full scope of council services.
Churches, charities and schools do not pay rates and in some cases they conduct commercial operations which produce profit. This rates exemption is carefully crafted into operational plans - and often gives them a competitive edge over others who do not enjoy this advantage.
Perhaps the time is approaching when this blanket ban on paying rates should be abolished - and replaced with a " case by case " appraisal for either full or partial rate exemption - until the next regular review.
Country councils fare poorly under the present regime. The NSW Forestry Corporation controls two million hectares of forest and reports a profit of $ 14 million in 2011/12 - and yet it pays no rates and competes with scores of private operators who conduct a similar operation to provide timber for industry - and who do pay council rates.
The problem with " blanket " exemptions is that clever accountants tailor commercial operations within the scope of the act to gain an advantage. A move to a regime where each case was examined on the basis of it's merits would level the playing field.
The ability to pay should be the prime consideration !
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