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CVC wary of rates deferral scheme for pensioners

Geoff Helisma |

Clarence Valley council (CVC) has maintained its opposition to the NSW Government implementing a scheme that would allow pensioners to defer paying their rates until their property is sold or changes hands.

At last week’s CVC meeting Cr Jason Kingsley described the suggestion as “a smoke and mirrors option”.

In its October 2016 submission to the Independent Pricing and Regulatory Tribunal’s (IPART) draft report, Review of Local Government Rating System¸CVC urged that the “pensioner concession must be fully funded by State Government”.

“A rate deferral scheme is problematic in local government areas with a high proportion of pensioners and low property values as it may result in less than full recovery of deferred debts from sale of properties and create cash flow issues for the Council,” CVCs submission stated.

However, in calling for responses to the IPART’s final report on the review, the Office of Local Government (OLG) advised that the deferral recommendation and several others were “not for consultation” because they “have already been implemented through other reform programs, or are currently the subject of separate consultation”.

The IPART report recommends, under the heading Improve assistance for pensioners, that a rate deferral scheme would be operated and funded by the NSW Government if introduced.

“Eligible pensioners would be allowed to defer payment of ordinary council rates up to $1,000 per annum and indexed to CPI, or any other amount as determined by the NSW Government,” the recommendation states.

Eligible pensioners would be able to choose either the current pensioner concession scheme or the proposed rate deferral scheme.

If an eligible pensioner chose the deferral scheme, “the loan should be charged interest at the NSW Government’s 10-year borrowing rate, and could become due when property ownership changes,” the IPART recommends.

Nevertheless, councillors unanimously made their dissatisfaction clear; expressing CVC’s “disappointment that no further consultation is being undertaken or feedback sought” on IPART’s recommendation regarding pensioner concessions.

During questions on the agenda item at last week’s CVC meeting, general manager Ashley Lindsay said he thought allowing pensioners to defer paying their rates was “problematic”.

Councillor Kingsley said “the pensioner subsidy [a maximum of $250 for general rates] has not increased since 1993”.

He said if it had increased in line with the annual rate peg “it would now be in excess of $500”.

“The recommendation does nothing to increase a 26-year-old subsidy; all it offers is a smoke and mirrors option that places a financial burden back on the pensioner and their estate, should they wish to exercise the option,” he said.

Councillor Karen Toms, “the devil’s advocate here”, said, “pensioner discounts cost this council about a million dollars”.

“It may be so that the [rebate] hasn’t increased, and that may be unfair, but let’s not forget that we do give a million dollars to pensioners off their rates every year,” she said.

She acknowledged that many pensioners struggle to pay their rates and said she understood issues faced by, for example, the “little old lady on top of the hill who bought a house years ago and now it’s worth a fortune”.

Despite not being in favour of deferring rates payments in the past, Cr Toms said she now “quite likes the idea”.

However, she said: “For me it’s about the consultation; why should there be no further consultation?

“I think it’s a subject we should put out there more.”

Meanwhile, citizens can make a submission via the OLG’s website up until Friday September 13, 2019.