Change rule to fix rates injustice
Charities avoid paying council rates at the expense of others, writes Dean Winter
IT is more than a year since the Supreme Court found that under existing Tasmanian law, organisations like Southern Cross Care, and wealthy residents living in its independent living units, do not need to pay rates.
The decision means a pensioner in their own home on one side of the street pays rates while the self-funded retiree in an independent living unit on the other side of the street does not.
One person contributes to footpaths, playgrounds and parks while the other does not, yet both use those community assets. This situation is fundamentally unfair.
Councils across the state rely on everyone paying their fair share so they can deliver the infrastructure and services expected. But the community also expects everyone to be treated fairly.
That is why Tasmanians will be aghast that organisations like Southern Cross Care — on behalf of its independent living unit residents — are hiding behind their status as a charity to avoid paying their fair share.
Councils do not, and will not, attempt to rate properties which are being used for actual charitable purposes. We also do not, and will not, seek to rate nursing homes. The exemptions in the Local Government Act for these institutions continue to be fully supported.
However, we cannot, and should not, accept that organisations like Southern Cross Care, who own and operate independent living units profitably, should not pay their fair share on that component of their business activity.
They are doing so while Tasmanians of advancing years who live in the family home, or rent, are required to pay their full share of rates. In effect, they are being discriminated against compared to those who sell up and buy into what is known as an independent living unit built on land owned by a charity. The Supreme Court decision exposed a serious drafting flaw in Tasmania’s Local Government Act 1993.
It’s a situation that only occurs in Tasmania yet the Government has so far failed to amend the Act to rectify this injustice. In other states, legislation comparable to Tasmania’s Local Government Act is drafted in such a way as to impose rates on owners of independent living units, whether or not the owner is a charitable organisation.
This is the correct approach because it is the purpose of the property and the status of the resident that should reflect whether an owner should be paying rates, not the status of the landowner.
If one group of residents is exempt from rates, the cost of council activities must be recovered from remaining owners and residents.
The consequence is that rates for all other ratepayers will be higher.
Local Government Minister Mark Shelton has committed to a decision about whether to support a fair and equitable rating system by the end of this year. As a former mayor, he should understand the arguments very well.
The Royal Commission hearings in Tasmania exposed serious flaws in the conduct of some charitable organisations that operate aged care. These are among those resisting the legislative change needed. It is time for them to meet their obligations by contributing to their local communities like everyone else.
The Local Government Association says it will not use amending legislation to widen or diversify its rates base for charities caring for the aged. It simply wants to restore equity. With such public assurance, it is difficult to see why the Government is not already acting to resolve the situation.
WE CANNOT ACCEPT THAT ORGANISATIONS LIKE SOUTHERN CROSS CARE, WHO OWN AND OPERATE INDEPENDENT LIVING UNITS PROFITABLY, SHOULD NOT PAY THEIR FAIR SHARE