Two reasons to determine rates bills

RATEPAYERS need to prepare themselves. The council budget, to be delivered in June, is being framed in a muchchanged economic climate.

Your rate bill, for two reasons, will go up.

Last year we received a 2.5 per cent rates rise with council choosing to pass on an increase in line with the consumer price index. The average rates bill was $1652.

Mayor Tom Tate estimated at the time the increase amounted to about

$1.44 per week, or a litre of fuel. How things change with rates and at the pump.

The previous budget was billed the “compassionate Covid costs freeze”. The average bill in 2020 was below $1600.

Go back to 2018 and Mayor Tate was all smiles with his eighth budget of low rate rises. The rate increase was 1.68 per cent, or about a dollar a week.

Fast forward to now and a recent council meeting in which a senior councillor rebuked another for saying rate increases would continue to mirror CPI. The remark prompted this column.

The first reason rates will rise is raging inflation.

Council points to the CPI for Brisbane as a budget guide.

The latest Treasury figures show Brisbane’s CPI increased 2.2 per cent in the March quarter, resulting in a six per cent increase over the year.

What does this mean for the Coast? “We are heading for 5.1 per cent (CPI),” a council source replied. “It will not be pretty, this budget.”

A big challenge in running the city is fuel costs estimated to have increased by 10 per cent. “We use a lot of petrol and diesel,” the council source says. “It would be definitely irresponsible to bring in a budget with an increase of only 1.4 per cent or 1.6 per cent.”

Councillors and the Mayor have been meeting regularly on Mondays for special budget sessions.

What has been going on at these confidential sessions?

“They will keep it under CPI,” a council insider replied. “Councillors have resolved that the rate increase will be under the CPI.”

So there is some comfort to be taken there, but not a lot.

“You can read between the lines. Wages costs are going up. The majority of work we do as a city is building roads. We will keep rates under CPI but the days of rate rises of only 1.9 per cent are over.”

The second reason your rates will increase is a bit of a lottery. The determining factor here, which is out of council’s control, is dictated by the valuation of your property.

Average growth here is much higher than Brisbane, a little more than 26 per cent for dwellings and 23 per cent for units. Housing values have risen as high as 31.5 per cent in the past 12 months.

The mathematics gets a bit complicated regarding rates. A council insider explains it in the simplest terms.

“The rate increase will be driven by the normalised average land increase. The closer the suburb is to the average land value increase, the closer their rate rise will be to the average rate rise.”

If your suburb has had a handful of abnormally high sales, expect to get a larger rate bill.

This will get interesting. How will council put a spin on to sell this budget?