There has been a public outcry in the Shire of Murray recently after business owners were left baffled by significant rate increases.
Rates are a tax on property levied by local governments to fund their activities and operations.
To address the onslaught of questions from business owners about the changes, the Shire invited Western Australia's valuer-general to a public meeting at the Pinjarra Civic Centre on Thursday.
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In July, 2017, the Shire of Murray announced local rates would go up on average 4.1 per cent due to Landgate’s Gross Rental Value (GRV) revaluation, which occurs every four years.
GRV is an important metric to help the Shire determine each business or resident’s individual rate notice.
Acting valuer general Lester Cousins, licensed property valuer Tania Peart-Whalan and senior valuer Russell Elkins explained their rationale and answered questions at the presentation.
Shire of Murray chief executive officer Dean Unsworth said the rates had varied significantly across the district due to the GRV revaluations, which affected the Shire’s rate on the dollar.
The Shire’s rates for each property is calculated by multiplying the GRV for a standard rate in the dollar, which determined by the Shire and applied to all households in the region.
Mr Unsworth said in the past year 33 per cent of properties in the Shire of Murray decreased in value.
However many business owners’ GRV didn’t decrease, meaning that a higher than average increase was expected.
Mr Unsworth said the rate decrease came as a shock to Shire executives and officers.
“No one saw that coming in their wildest dreams,” he said.
He said by the time the valuation was realised, the budget was in the process of being finalised.
“In hindsight we should have had the information sooner,” he said.
He said the alternative to not approve the budget wasn’t viable as it would’ve caused significant set backs for the Shire and Council.
In 2015/16 the Shire of Murray’s revenue decreased and their operating expenditure increased, a point that Mr Unsworth highlighted during the meeting.
He also said council also decided to lift the Shire’s budget from $16 million to 16.1 million, another move that prompted rates to rise.
He said council would be forced to spread load onto residential properties in the next budget.
“Council is listening to the hurt that businesses are feeling. I can’t tell you what the council will do but I can tell you they’re listening,” he said.
Teamed with a down-turn in the economy over the past couple of years, businesses are struggling to comprehend the increases, according to Pinjarra Bakery and Patisserie founder and director Larry Pantaleo.
Mr Pantaleo said his business had been hit hard in recent years and attended the meeting to find out the Shire’s motives for the move.
“We’re being hit by increases everywhere. All the taxes are building up,” he said.
“Over the years the shire has been steadily increasing rates. In my opinion they’re very top heavy.”
Mr Pantaleo called for the local government to pull back on their spending to that the pressure off local businesses.
Mr Pantaleo owns several properties in Pinjarra.
In 2010, one of his properties rates were set at $20,760 and they were up to $39,000 in 2017.
He said a rise of 88 per cent over seven years was “just not sustainable”.
“The Shire needs to know they can’t keep doing this. It’s frustrating,” he said.
Mr Pantaleo said he was forced to pass costs onto tenants leasing out some of his properties.
Despite his woes, Mr Pantaleo said overall the meeting was very informative.
Shire president David Bolt said the meeting was part of the local government’s push for transparency.
“The intent was to bring the experts to the business,” he said.
He said the Shire would look into the impact on businesses, their growth and the economic sustainability of the Shire.
“We need to look at this very seriously going forward from a economic development point of view. We know businesses are important to drive that.
During his presentation, Mr Elkins explained that among other things the valuation is taken off the size, age and location of the property.
He said that throughout the year rates fluctuate even through the GRV stays the same and that evidence of the market is only taken around the date of valuation.
“We look at the evidence and we try and be fair and reasonable and set it to that,” he said.
Manager of the Murray Chamber of Commerce and Industry Donna Cocking was in attendance and said the meeting was a great opportunity for businesses to air their questions.
She was pleased the Shire had appointed a economic development manager after the business sector had pushed for a representative with on local government for the past 18 months.
The next valuation audit is due to be investigated in 2021.
