The Elephant In The Living Room

By Kevin Borg, Chairman, CANEGROWERS Mackay
Isaac region residents have followed the Mackay Region and received new Land Valuations, with some dramatic increases causing discussion and anxiety as they take in the new valuation.
Across the board, the total value of rural land across the region has increased by 70%. But for many, increases are beyond 100%.
That, of course, translates into rates increases for landholders. While CANEGROWERS Mackay is continuing discussions with Mackay Regional Council on the rates burden for canefarming enterprises, we now are also initiating discussion with Isaac Regional Council.
While the State Valuation Service points out that rates and rating categories are under the control of local government, councils readily point out that they are based on state valuations.
For the property owner, this blame game puts us in a position of being like the piggy stuck in the middle, in a game where the ball gets higher and higher, more out of reach.
For a canefarmer, meeting the cost of rates is a double challenge. It’s about maintaining the family home and the family business. It is an ever-ballooning cost of production that sits alongside the pressure of the cost of living.
Canefarming is like quite a range of agribusinesses that are price takers, not price makers. We are at the mercy of world sugar price. There is nowhere to pass on inflating costs of production. It’s about margins. Sugar price is strong right now, but so are costs, and cost of production is unfortunately on a steep trajectory. There will be years when that price will almost certainly move closer to the cost of production. If we are lucky, the lower sugar prices will not go in tandem with drought, fire or flood.
The cost of living is a community-wide pressure. And while local government also faces the pressure of inflation, and has to meet its increasing costs, the continual pressure on landholders needs to be addressed.

Rates cost increases precipitated by steep increases in valuations are effectively a money grab: councils have the powers to set parameters within their rating system that could show greater empathy to cost of living pressures of landholders. But equally, local governments need to be supported by other levels of government to utilise a range of mechanisms that help to meet their budgetary requirements - not just via rates revenue.

The Queensland Government has a voluntary Guideline on equity and fairness in rating for Queensland local governments. CANEGROWERS is part of a growing list of organisations urging that the guidelines should be adopted as mandatory for all councils. This is a move also supported by the Queensland Farmers Federation (QFF), of which CANEGROWERS is a member.
The QFF has also reported it will be putting a submission to a Federal Senate inquiry into the sustainability of local councils, calling on the federal government to increase the allocation of financial assistance grants provided to local councils. These grants come from GST revenue, however, whilst GST revenue has continued to grow, the allocation / revenue split to local councils has remained unchanged, and has in real terms actually declined.
A sustainable council is critical to the local community. The local government share of the GST allocation needs to be increased. This will be the major lever that can assist with the financial viability of councils, allowing them to have more wriggle room when it comes to their strategies to raise income through rates.

Another major influence on cost-of-living is the market element in determining property valuations, often driven by some quite outlandishly high sales in some localities. Who really wins when a property is sold well over value? Banks? Real Estate? High land prices set off a domino effect.
Governments and opposition are always talking up how they are addressing cost-of-living issues, but they aren’t addressing that elephant in our living rooms – the influence of market value on property valuations, which impacts right down the line from landholders to renters to the community. The more money it costs to keep a roof over our head - or business – and to maintain our rates bill, the less there is to spend in local businesses and on other qualities of life.
Controlling ever-spiralling rates and land values is an issue on which all levels of government need to work together to ease cost-of-living pressures. Creating a fair system of rating categories is something that local government can do to ease community cost of living issues but we also need to see economic sustainability and services maintained at the local government level.

Isaac region cane country.  Picture: Kirili Lamb

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