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Govt backflip over community housing rates

Jul 01, 2015
Local Government Minister Geoff Brock

Local Government Minister Geoff Brock

The Weatherill Government has backflipped on plans that could have seen not-for-profit providers forced to pay full council rates for community housing projects.

But the Local Government Association warns the decision could push the costs onto fellow ratepayers in “high social needs areas”.

As InDaily reported last month, a draft bill sought to remove council’s obligation to cover a 75 per cent rate rebate on properties transferred from the state Housing Trust to the not-for-profit sector.

But InDaily has learned the relevant clause has now been removed, with the Bill set to be introduced to parliament today.

The LGA’s acting CEO Mark Searle said the association “remains concerned that the current legislation reduces the rate contribution of community housing providers by transferring the cost of providing local services to the other residents in high social needs areas”.

“The LGA will continue to negotiate with the State Government seeking a socially just outcome,” he said.

It’s understood Local Government Minister Geoff Brock favoured the change, but he told InDaily in a statement that “responsibility rests with Minister for Housing and Urban Development” John Rau.

“Following discussions with Minister Rau during the consultation period, it was decided not to proceed with (the amendment),” he said.

“Minister Rau has indicated to me that he will take into consideration the need to oversee the program of transferring former Housing SA stock to community service providers in a way which minimises any negative impacts on councils.”

In May, 1100 Housing Trust properties were transferred to community housing providers AnglicareSA Housing and Junction Australia across Elizabeth Grove, Elizabeth Vale and Mitchell Park, however it’s understood those providers signed a contract agreeing not to claim the rebate.

John Rau. Photo: Nat Rogers/inDaily

Minister for Housing and Urban Development John Rau. Photo: Nat Rogers/inDaily

A further 3900 are slated to be transferred soon, with councils in the affected areas now potentially liable to miss out on significant revenue.

Rau told InDaily he was not ready to enshrine any change in law, as “we need to think about it further”.

He suggested the threat of losing rates revenue could be a bargaining chip when negotiating with local councils on social housing transfers to the not-for-profit sector.

“At the present time, the way the thing is structured, it actually in effect compels Local Government to sit down with the State Government and have a conversation,” he explained.

“If they don’t engage with us, there’s a 75 per cent rebate required so that’s a big incentive… If they didn’t have that, there would be no reason for them necessarily to sit down with us at all.”

Rau said the “most productive way of managing this” was on a case-by-case basis, instead of wholesale legislative change.

“I’ve indicated to Geoff Brock I’d be very happy to have a conversation with him,” he said.

“But if you look around the country, in most other jurisdictions there’s some exemption from council rates for properties held for charitable purposes (and) social housing activity for not-for-profits fits within charitable purposes.”

He said he hoped to fast-track the state’s divestment of the remaining earmarked homes.

“I’d like to get a few thousand of them out over the next 12 months or so, but I’m not going to rush it and get substandard outcomes for the tenants,” he said.

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