Last year, the council commissioned local government finance expert John Comrie to review its rating and revenue sources.
Comrie’s draft interim report – to be presented to the council at a committee meeting tonight – argues state and federal governments are better placed than the council is to fund “welfare support” initiatives, including the annual rates rebate for pensioners.
Council currently offers eligible ratepayers an annual rebate of $100.
“[Adelaide City Council] is one of the very few councils state-wide that provides a rating remission to pensioners,” the report says.
“Generally speaking, from an equity basis, welfare support of this nature is better undertaken by state or federal governments as they have much broader sources of income and mix of taxpayers to spread the financial costs across.”
The report instead says pensioners who cannot immediately afford council rates should be able to defer paying them.
“The LGA [Local Government Association] has encouraged councils to offer rate deferrals rather than permanent concessions to pensioners,” Comrie writes.
“Well-designed deferral arrangements have no long-run cost to councils and can assist ratepayers in addressing capacity-to-pay challenges.”
LGA CEO Matt Pinnegar told InDaily allowing deferred payment rather than offering a rebate shielded the community from an impact on council revenue.
“Ultimately this is a decision for council, but a deferment offers an opportunity to provide relief to a ratepayer without impacting on the rest of the community or affecting a council’s ability to deliver services,” he said.
But Treasurer Tom Koutsantonis told InDaily scrapping the rebate would be a “pathetic abdication of responsibility”.
“It would be completely unacceptable and a pathetic abdication of responsibility if the council discontinued a concession and attempted to blame the State Government,” he said.
“The Adelaide City Council has substantial revenue streams when compared to other South Australian councils, resulting from rates charged on city businesses and revenue for parking assets and issuing fines.
“The Council is meant to be autonomous and should continue to offer concessions on rates based on people’s capacity to pay.”
He added that the State Government provides about $850 worth of concessions to pensioners each year, including a $200 ‘cost of living’ concession, “which the State Government introduced when the Commonwealth scrapped their council rate concession”.
North Ward councillor Anne Moran told InDaily it would be “a bastard move” if the council scrapped the annual $100 rebate to pensioners.
“A bastard move, I’d call that,” she said.
“I’d actually support increasing it.
“We’ve got a lot of elderly people who are asset rich but [income] poor… I don’t know why we [would] be so mean.”
She said the rates concession helped pensioners stay in their homes, but added there was little likelihood scrapping the rebate would gain support among councillors.
Moran said it was “better for older people to stay in their home” if they wanted to than to enter a nursing home.
“I’m pretty sure [other] councillors will oppose it,” she said.
Fellow North Ward councillor Phil Martin, who called for the ratings review, said he believed the current ratings system was unfair, and ripe for reform.
However, he added, “I believe any initiative … should be about making it more equitable, not less equitable, and that particularly relates to aged pensioners.”
“I’m not in favour of causing any [increased] disadvantage in the community,” he added.
“My goal has always been to ensure that the ratepayers of Adelaide… have the best rating system in South Australia.
“There’s a perception among many of our ratepayers that it’s far from the best.”
Central Ward councillor Houssam Abiad said the council should continue to provide the annual rebate.
“Just like we’re prepared… to rate businesses higher because [they make] profits, we need to do the same on the opposite end of the scale,” he said.
“I’m all for continuing spending that line of discount in our rates.”
A council spokesperson told InDaily: “This is a draft independent report that has compared the City of Adelaide’s rating system to similar local government areas, finding that council’s rating approach is reasonable and that average residential rates are consistent with the state-wide average.”
“Councillors will tonight have the opportunity to discuss this independent report and the consultant’s recommendations, prior to its formal presentation at a council meeting next month.
“[The] council has not made any decisions and would undertake a rigorous review and consultation process as part of considering any changes to the rating policy.”
Self-funded retirees don’t need rates rebate: report
Comrie’s report also suggests getting rid of the annual $50 rates rebate for self-funded retirees living in the CBD and North Adelaide.
“Evidence from previous research on this topic indicated that the average annual income of self-funded retirees in South Australia was in fact higher than that of the average SA ratepayer,” the report says.
Abiad said the subsidy for self-funded retirees should be means-tested.
However he said the rebate might be justified because people on higher incomes spend more money at city businesses.
“If they [self-funded retirees] have got higher earnings they have got higher spending, and that’s a very good thing for the city of Adelaide,” he said.
“We want to attract more of them.”
Martin said: “Self-funded retirees on very substantial incomes should not be receiving concessions that are out of proportion.”
Moran agreed the rebate should be reviewed, arguing there was “less rationale” for helping self-funded retirees, as opposed to pensioners.
“That is one that is up for debate,” she said.
“I’d have to look at the rationale of why we put it in in the first place.”
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