Local governments across Western Australia are demanding an urgent crackdown on rating exemptions they claim are robbing them of hundreds of thousands of dollars in crucial revenue each year.
Charitable Status Exploited, Services Suffer
The WA Local Government Association (WALGA) has lodged a formal submission arguing the current system is being exploited. It states that some organisations are cashing in on a measure designed for genuine charities, leaving other ratepayers to foot the bill for community services.
WALGA President Karen Chappel said the interpretation of what qualifies as a charitable organisation has become too broad. This allows not-for-profit entities with commercial arms to unfairly claim exemptions from paying council rates.
"They're taking the opportunity that's available to them," Ms Chappel said. "If there is an opportunity to have an exemption, of course a charitable organisation will take it."
She highlighted assisted-living facilities as a prominent example of where the exemption is commonly applied, potentially for operations that have a significant commercial character.
The core issue, according to WALGA, is that this lost revenue directly impacts the ability of councils to fund essential services that residents rely on. This includes maintaining libraries, collecting bins, and repairing local roads.
Call for Independent Review and Mining Licence Concerns
To address the problem, WALGA is calling for $200,000 to be allocated in the next State Budget. This funding would be used for an independent, broad review of all rating exemptions to ensure they are justifiable and fair.
"It's about whether a commercial arm of a charitable organisation should be eligible. That is probably the question," Ms Chappel stated. She emphasised the association does not want to remove exemptions for genuine charities, but to restore the system to its original intent.
The submission also raises serious concerns about a separate State Government decision to widen exemptions for "miscellaneous" licences, which includes mining companies. WALGA argues this move was made without proper consultation with the Local Government sector and contradicts a previous ruling by the Supreme Court of WA.
"While a robust and competitive resources sector is vital to the State's economic prosperity, it must not come at the expense of regional communities," the submission warns.
Fairness for All Ratepayers
Ms Chappel predicted the total lost revenue from all exemptions would run into the hundreds of thousands of dollars annually. She framed the issue as one of community fairness, where one section of the community is supported by those who do pay their rates.
"Local governments provide services and infrastructure for everybody in our community," she said. "When you've got one section of your community having an exemption, those that are actually paying rates, they're supporting the other section."
In response, a Government spokesperson noted that Local Government Minister Hannah Beazley has met repeatedly with the sector over the past year. The spokesperson said feedback from these discussions would be considered in any future reforms.
Regarding mining licences, the spokesperson said the Cook Labor Government acted to provide certainty by introducing a Bill to restore the longstanding policy that Crown land under such licences is not subject to rating.
