Rates and Charges

Rates and charges are a key method for local government to generate the revenue which enables them to deliver services to their respective communities.

Rates

Rates are a tax that is usually based on the values of properties.  The most common method is the unimproved capital value (UCV) of land set by the Valuer General with no input from councils.  Rates are not reflective of the services used by any particular property but contribute to the whole communities’ use of council services just like the taxes paid to the Australian Government contribute to a range of government activities.

Being a tax the rates paid may not relate directly to the services,  infrastructure or facilities used by each ratepayer (eg not all ratepayers will use parks, a public library, cycle paths or a public swimming pool) and it is not possible for many services to be charged out on an individual basis (eg street lighting).  However all residents and businesses in local government areas make use of local government services, infrastructure or facilities at some point in time regardless of where they live (eg driving on roads, using parking space, putting rubbish in a public bin, benefitting from street lighting).

Although not specifically required by the Local Government Act 2008 to have a rating policy Section 127(e) requires a Council to include “…an assessment of the social and economic effects of its rating policies…” in its annual budget.  To assist with this process LGANT has developed a Rating Guidelines Manual for Northern Territory Local Governments.

Conditional rating

Local government in the NT operates under a system of conditional rating which restricts their ability to generate the revenue required to deliver all the services expected of them by the community and through the Local Government Act 2008 (Section 11.1).

Under section 142 land held under a pastoral lease or occupied under a mining tenement are considered conditionally rateable. Rating proposals for conditional land are submitted to the Minister for approval based on consultations with the ministers responsible for both the pastoral and mining sectors.  This does not apply to other ratepayers.

Charges

Under Section 157 of the Local Government Act 2008 councils can impose charges to the land owner. Payable by the ratepayer, these are charges on the land for the provision of services for the benefit of the land or occupier. Charges are not ‘fees for service’, rather they are enacted to recover the cost of a specific action e.g. rubbish collection and pool entry.