CBH in row on rates
CBH and other charitable, religious and not-forprofit groups operating profitable businesses are in the firing line of local governments that are seeking removal of their current rate exemptions.
The WA Local Government Association hopes to claw back some of the $45 million it estimates is forgone in shire and council rates each year by not taxing these organisations.
WALGA president Lynne Craigie said removal of rate exemptions was a key plank of its submission to amend the Local Government Act, which would be provided to the State Government by March 2019.
“Our policy is to make changes to the charitable organisations section of the Act to eliminate rate exemptions for commercial — non-charitable — business activities of charitable organisations, or set up a compensatory fund for local governments,” she said.
“Local governments would then be able to collect rates based on the current valuation system, or negotiate with individual groups about the level of contribution they would make to a compensation fund.”
CBH is registered as a co-operative and is 100 per cent owned by WA grain growers.
On the basis of the benefits it delivers for these growers, and the grain industry, it is endorsed as a charitable body at a Federal level.
If it lost charitable status under the proposed WALGA amendments, it could be required to pay significant sums in rates or compensatory payments to local governments across the State.
CBH generated almost $3.5 billion in revenue in 2017 and reported a net profit of $91.3 million.
The group receives and stores 90 per cent of WA’s grain production at its 195 facilities across the WA
grainbelt and has four strategically located grain export terminals.
As part of its long-term network strategy, it has stated it will focus future maintenance and capital investment on a core 100 sites.
Many of the CBH sites are on substantial land parcels that could provide many smaller shire and council bodies with funding for infrastructure, such as roads, if CBH was forced to pay rates or equivalent compensation.
It is understood that CBH pays a negotiated ex gratia payment to some shires, but the group declined to comment on the amount.
It also declined to comment on WALGA’s proposed changes to the Local Government Act.
Ms Craigie said the CBH exemption was a good example of why the Act needed to be modernised.
“We are not seeking to remove rate exemptions from groups that legitimately need them but we would like local government bodies to be able to negotiate with these groups in their districts about appropriate rates,” she said.
“This should also apply to religious or charitable groups running profitable farming businesses.
“If they are using land to produce and sell crops, they should pay rates.”
The City of Greater Geraldton has many CBH receival sites across its district that are not subject to rate payments.
Mayor Shane Van Styn said CBH did pay a non-compulsory, mutually agreed “rate equivalent” ex gratia amount to the council for its local receival sites but this was below commercial values, in his opinion.
“We think all land should be rateable and then individual local governments should be able to negotiate with groups in their jurisdiction to determine any rate concessions,” Mr Van Styn said.
Mr Van Styn estimated the council could potentially receive $2 million in extra rate revenue across these organisations if their exemption was lifted.
City of Albany mayor Dennis Wellington said many charitable groups in Albany did not pay rates, but enjoyed amenities funded by other ratepayers.
Mr Wellington estimated the district was missing out on about $500,000 in revenue from these potential ratepayers.
He said CBH and any other farming operations run by charitable groups should be part of the ratepaying system.
Changing the rules would generate much needed revenue for local governments throughout the south coast.