Shire of Katanning introduces 5.9 per cent rate increase as rate rises revealed across Great Southern shires

Shire of Katanning ratepayers will be hit with a 5.9 per cent rate increase as local governments across the region set their rate rises for the next financial year. After two years of reduced rate rises because of the COVID-19 pandemic, many Shires are increasing their rates by more than 4 per cent as inflationary pressures bite. Katanning councillors unanimously approved a 5.9 per cent rate increase at a meeting on August 26 “The budget is always a challenge, and we are planning to ensure it is sustainable into the future,” Shire president Liz Guidera said at the meeting. Landowners in the Katanning townsite who have their rates determined by gross rental value (GRV), which is the amount of revenue a property can earn if rented once taxes and other deductions are made, will pay 11.1565¢ per rateable dollar this financial year. Landowners in the shire who have their rates determined by their unimproved value (UV), which is the value of the land without including any infrastructure on it, will pay 00.8667¢ per rateable dollar. The minimum rate for Katanning ratepayers this financial year is $1078. The changes are expected to generate an additional $272,328 for the Shire. The council is set to pose a net deficit of $6.07 million this financial year, which includes losses from the depreciation of long-term assets such as roads and buildings. Chief executive Julian Murphy told the Herald carryover projects from previous years had played a role in the size of the deficit. Council documents also show more than $1.78m in general purpose funding allocated to the Shire for this financial year was received in April and was therefore included in the 2021-22 financial year result. In the Shire of Lake Grace, corporate services manager Tegan Hall said rising property prices were a key factor in determining rates. “The UV rate was not increased by rate in the dollar as per previous practice as the Shire have received notification from Landgate that the property values on unimproved rated properties had increased by an average of 19.96 per cent across the board,” she said. “Instead, the rate in the dollar has been reduced to allow for an overall increase of 10 per cent so as to reduce the impact of the increase in valuations.” Townsite properties which have their property rates determined by gross rental value will have their rates increased by 3 per cent. It is a similar approach to the one the council took last year, when UV rates were not changed due to a 9.42 per cent increase in land valuations. Budget documents show the council will bring in an additional $380,605 compared with last financial year due to the rate increases. Shire president Len Armstrong said the council had been “massively impacted” by rising property prices. He described this year’s budget as a “balancing act”. “Around Newdegate, we have had some multinationals buy up farms, and the price they are paying for land is quite high,” he said. “A 10 per cent rate rise does sound the alarm bells, but the council has no control over the increase in land valuation. Despite the increases in rates, the Shire is expect to post a net deficit of $524,266 this financial year, compared with the $4.69m net surplus recorded in 2021/22. Mr Armstrong said he expected it to be an one-off scenario because of a construction backlog. “We have a stack of programs carried over from last financial year as we have had a number of issues finding tradies and contractors,” he said. In the Shire of Cranbrook, councillors have voted to implement a two-tier rate rise, with rural ratepayers set to bear the brunt of the increase designed to keep up with rising costs. Landowners who have their rates determined by unimproved value face an 8 per cent rate rise, while predominantly townsite ratepayers will pay an extra 3 per cent. The increases are expected to generate an extra $191,858 in rates revenue. In her report to councillors, chief executive Linda Gray said the Shire had stuck to the lowest possible rate rises over the past decade, which had resulted in rates growth being lower than in neighbouring councils. “Good financial management has been in place, but as costs increase there will be a lower level of service and/or a reduction in the maintenance/renewal of its assets,” she said. “As new assets come on board through grant funding, operational costs have also increased and widened the funding gap.” Ms Gray said increasing rates was ideally a strategy of last resort, given the pressures facing local families and businesses. “It is, however, important that prudent rate increases form part of the multi-pronged approach to financial management, and each year the Shire is realistic in its rate rises versus the level of service and the maintenance of its assets that ratepayers expect,” she said. “Council needs to set rates at a consistent but realistic level so there is no spike to address funding requirements in the future.” Further north, the Shire of Kojonup has also voted to let rural ratepayers take more of the financial hit after the council adopted differential rate increases at a special meeting on August 2. UV rates will increase by 7 per cent, while GRV rates will rise by 5 per cent, bringing in an additional $272,706 in revenue. In the executive summary of the adopted budget, chief executive Grant Thompson said the budget had been designed for “sustainable growth”. “The current economic environment post COVID-19 means the Shire must now consider inflationary pressures, increases in the cost of borrowing future money and the general cost increase pressures that are materialising,” he said. “The current rate setting in this budget is a fiscally responsible approach to buffer the Shire’s and community’s financial volatility and sustainability through the next uncertain phase.” The council expects to have a net budget surplus of $1.53m this financial year, compared with the $140,061 net deficit recorded last financial year. Jerramungup ratepayers will be hit with a 5 per cent rate rise as the Shire predicts it will go into the red this financial year. After a $4.71m surplus last year, the Shire is expecting to record a deficit of $173,826 for 2022-23. The result is driven by a $2.25m increase in expenditure on materials and contracts. Chief executive Martin Cuthbert said the increased expenditure was due to “the current economic market” and described the increase in rates as “modest”. “The requirement to increase rates by a higher percentage this year is required to ensure the upkeep and maintenance of the Shire’s infrastructure,” he said. Shire of Broomehill-Tambellup councillors voted to to increase rates by 4 per cent this financial year, netting the Shire $108,436 in additional rates revenue. The Shire of Gnowangerup has adopted a 3 per cent rise in overall rate revenue, which will bring in an extra $118,858 for a net budget surplus of $59,577. The Shire of Kent has one of the lowest rate rises in the region, with rates set to increase by 2.5 per cent this financial year. The rate in the dollar will be reduced due to the total value of land in the Shire increasing by 19.8 per cent in the past year. However, the Shire is expected to finish 2022-23 with a deficit of nearly $400,000 after last year’s surplus of $3.06m. Shire president Scott Crosby said he understood the hole in the budget was due to carryover from last year. “We are doing what we normally do — we are hoping to improve our assets, improve our roads and maintain others,” he said. “We have a few projects which have been impacted by COVID that we would like to get off the books. “We are just hoping that costs don’t increase as that is a common issue among councils at the moment.” In the Shire of Wagin, councillors backed away from a proposed rate rise of 4.9 per cent, instead settling on 3.9 per cent at a meeting last week. The Shire expects to post a net deficit of $2.13m for 2022-23, driven by higher employee and asset depreciation expenses. In the Shire of Woodanilling, councillors were set to vote on Tuesday on a proposed 7 per cent rate rise. As the Herald has previously reported, the Shire of Dumbleyung voted to increase rates by 5 per cent for 2022-23.