Photo: Terinea IT Support
The Western Australian government will force local governments to impose rate cuts on mining tenement holders in their jurisdictions.
The move comes as a result of the Colin Barnett government’s latest amendments to the Valuation of Land Act 1978, which will cut recent rate increases of up to 400 per cent on mining tenements and up to 3,000 per cent on petroleum exploration permits.
The state government has deemed these rate rises as “excessive” and that they have come as a result of regulation changes in 2006, which escalate state government rents as exploration licences near the end of their terms, under the ‘use it or lose it’ principle.
WA Minister for Lands Terry Redman said the legislation would reduce and stabilise local government rates by dropping the five times multiplier on petroleum permits and ensuring the unimproved value of mineral exploration licences was always calculated on the rent payable in their first year.
“We support fairness and equity and worked as quickly as possible to restore a level playing field for regional shire rates,” Mr Redman said.
He said these reforms provide “well-deserved relief” for WA’s mining and petroleum sectors and protect the integrity of local government by setting clear land valuation parameters.
It’s a move that’s significant for local governments that have mining communities under their jurisdiction because councils use property valuations from the Valuer-General to calculate the appropriate rates.
Minister for Mines and Petroleum Bill Marmion said the legislation allows the Valuer-General to apply the reduced values for the 2015-16 rating year.
The local government sector presented its view shortly before the new amendments were confirmed in May 2015, which told a story that wasn’t acknowledged by the state government.
In fact, the Western Australian Local Government Association (WALGA) said the valuation changes are only “half the story” on mining tenements.
Although the Association welcomed the state government’s move to ensure that the process of calculating council rates on mining tenements based on state land valuation remains appropriate, WALGA Deputy President Lynne Craigie argued that the legislation fails to also address non-payment of legitimate local government rates.
Ms Craigie said a number of tenement holders are failing to pay any rates at all and the changes necessary to address this also need attention from the government.
According to Ms Craigie, the non-payment of legitimate rate bills by some tenement holders was creating revenue shortfalls in a number of remote and regional local governments
The big kicker there is that general ratepayers are “footing the bill” for these “recalcitrant tenant holders”.
The solutions to this problem might seem simple as Ms Craigie pointed out that the state government has the power to terminate a tenement for not paying the required annual State rent.
But she strongly argued that local governments face “great difficulty” in enforcing the payment of rates from the same tenement holders.
“Tenements can be sold without ensuring rates payments are up to date; and many tenement holders are shelf companies with no other assets, making it difficult and costly for Councils to pursue outstanding rates,” Ms Craigie said.
She said the situation would be significantly improved if local government rates were included in forfeit conditions for non-payment of rent to the Department of Mines and Petroleum.
