Rate Capping

Mr MURRAY (Davenport) (14:34): My question is to the Minister for Transport, Infrastructure and Local Government. Will the minister inform the house why the introduction of a rate cap on council rates is important for households, including those in my electorate?

Members interjecting:

The SPEAKER: The minister will be heard in silence.

The Hon. S.K. KNOLL (Schubert—Minister for Transport, Infrastructure and Local Government, Minister for Planning) (14:34): I thank the member for Davenport for his question and note his ongoing concern in this area. I also note the wonderful maiden speech he gave earlier and I welcome him to this house. The member for Davenport is at the epicentre of this rate capping debate, being someone who is a constituent of the City of Onkaparinga.

I want to lay out a few statistics, and I will attempt to do so in a way that is not confusing—and herein lies exactly why we need to bring in a rate capping scheme here in South Australia. The best statistic I can give is that in the last quarter of last year the average wage increase across Australia was 1.8 per cent. At the same time, over the 2017-18 year the average council rate increase in total rate revenue was 6.01 per cent—three times what wage growth has been. This has been a consistent figure over the course of the last decade, where we have seen a disparity between what councils have been willing and able to increase their rates by and the capacity of households to pay.

In the case of Onkaparinga, which is on the slightly worse end of the scale when it comes to rate increases, over the decade to 2016-17 it had a 74 per cent increase in the council rate budget, going from $69 million to $120 million in 2016-17. I note that in 2018 that has been pushed out to $130 million. These are huge increases. Across South Australia over the decade to 2016-17 the increase in council rate revenue was 79 per cent but over the same period state government taxation has not gone anywhere near that increase, being far closer to inflation.

I also want to deliver a few other statistics. One of the main arguments that councils have been putting out there is, 'Our councils are high-growth areas. Our councils have been growing, and that is why we need this extra rate revenue.' However, delving into that, that is simply not the case. If we look at the increase in the total number of rateable properties over the 2017-18 year, at the same time as rates are growing by 6 per cent growth in the number of rateable properties has increased by only 0.78 per cent. In 2017, with a 3.89 per cent average increase in rates the growth of rateable properties was only 0.73 per cent and in 2016, on a backdrop of increased rates at 4.67 per cent, rateable properties increased by only 0.59 of 1 per cent.

Those figures, well under 1 per cent in the growth end of the rateable property base, are not an answer for why rates are growing at three times the rate of inflation, over three times the rate of wages growth. This is what is unsustainable about the way councils are continuing to further and further punish households and businesses in order to fund their own budgets.

Having given those figures, we on this side of the house have an ambition for growth in the number of rateable properties. We would like to see more private business investment, more private household investment, more houses being built both on our fringes and as infill, and we have taken policies to this last election that will help accelerate that growth. However this has not, over the last decade, been an excuse that councils can logically use for why we have seen rates grow the way they have. It is why those on the other side of this house, especially, as well as those in the other chamber, cannot believe this argument for councils is a reason to vote against the upcoming rate capping legislation

Time expired.