Rate exemptions drive Lord Mayor around the (Oliver) Twist

Non-ratepaying city sites and agencies shortchange Adelaide City Council by millions and force it to bring out the begging bowl, argues Jane Lomax-Smith.

Jul 03, 2023, updated Jul 03, 2023
Image: Tom Aldahn/InDaily

Image: Tom Aldahn/InDaily

One of the things I really dislike about being Lord Mayor is being expected to constantly beg the Premier and Cabinet for money.

Whether it’s street upgrades, the rollout of innovative programs or getting big-ticket infrastructure projects off the ground, it’s hard not to feel like Oliver Twist begging for more gruel at suppertime.

The truth of the matter is this: The City of Adelaide should be able to pay for these initiatives – and much more – on its own.

However, the City of Adelaide is host to a range of organisations that are exempt from paying any council rates or those who receive significant rebates.

These include government office towers, schools, churches, universities, hospitals, the Adelaide Oval Hotel and even the start-ups at Lot Fourteen, situated on the site of the old Royal Adelaide Hospital along North Terrace.

As a capital city council, we are disproportionally impacted by rate exemptions. We have the largest proportion of non-ratepaying organisations of any South Australian local government.

These exemptions mean the City of Adelaide misses out on the equivalent of about a third of our rates income, or more than $40 million worth of rates income annually.

Although only 58 per cent of our revenue comes from rates, compared to almost 80 per cent at other councils, it still means the burden is shifted to those who must pay.

Compounding this, we don’t get state road funding, so we are cash poor and asset rich.

No wonder most Lord Mayors over the decades have complained that many institutions should pay their fair share.

It seems unthinkable that we must ask the average Joe Blow ratepayer to cough up more for their rates and charges, while organisations turning over almost $1 billion every year get away with not paying a cent in council rates

The current Council have again highlighted the impact of the exemptions, while Greens MLC Robert Simms has recently raised this issue within his attempt to amend the Local Government Act, which would allow us to charge council rates on some buildings on crown land.

This move comes just as our Council adopts a 2023/24 budget focused on fiscal repair, where to properly maintain our public realm, we have needed to cautiously raise revenue through various fees, charges, and our rating system.

This has included reinstatement of the park land event fees, outdoor dining charges, and a modest increase in user fees and charges of roughly 5 per cent. 

It seems unthinkable that we must ask the average Joe Blow ratepayer to cough up more for their rates and charges, while organisations turning over almost $1 billion every year get away with not paying a cent in council rates.

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Just imagine for a moment what an extra $40 million would do in the council budget. This could pay for a mainstreet upgrade – or two, greening of our city, and upgrades to some of our ageing assets.

It would be much simpler if state entities, and other organisations, paid their rates so we could adequately pay for these things ourselves, without having to constantly beg.

After all, we know that State Treasurers hate giving us any money as they have to classify cash for upgrades to say King William Street or North Terrace as a grant, while money for their own infrastructure (for technical accounting reasons) would not affect their annual budget in the same detrimental way.

Perhaps to avoid rate assessment or paperwork and giving unwanted control to the City Council, the State Government could just make an annual ex gratia payment to be disbursed only on agreed road or park lands projects.

I would love to stop nagging the State Government for more money. 

To borrow a phrase from that well-known Midnight Oil song:

“The time has come.

“To say fair’s fair.

“To pay the rent.

“To pay our share”.

Dr Jane Lomax-Smith is Adelaide’s Lord Mayor

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