‘Price gouging council’

Sir – At a recent Katherine Town Council meeting the Mayor stated that I was the only person to have approached the council expressing concern about rates in Katherine.

 

The well attended rates forum convened by the council in mid 2019 makes a mockery of this absurd mayoral claim.

 

Rates in Katherine are calculated by multiplying the unimproved capital value (UCV) of a property, as assessed by the Valuer General, by a differential set by the council. Differentials vary according to the use of the land, residential, rural, commercial, and agricultural etcetera.

 

In July 2019 when UCV’s were last assessed, the Valuer General factored in a widespread fall in property prices, due in part to PFAS contamination concerns.

 

In September 2019 when rates were set for the 2019-20 financial year, in addition to increasing the differentials, the council used the higher UCVs from the previous financial year. This questionable practice created the ironic situation of rates increasing on properties that have fallen in value.

 

While rates have been rising steadily over the last few years, because of the method used by the council to set rates for the 2019-20 financial year, it is arguable that this year’s percentage increase is the highest that Katherine has ever seen.

 

When rates are set for the 2020-21 financial year, because the council will be compelled to use lower UCVs, the differentials used will need to be substantially higher to allow the same amount of rates revenue to be collected.

 

Of course if the council determines that it must increase its revenue, a very likely situation, the differentials will need to be increased even further.

 

If a retailer with a monopoly on the supply of an essential commodity is charging excessively high prices for merchandise, there will be widespread accusations of a practice referred to at times as price-gouging.

 

The Katherine Town Council, with its monopoly in respect to charging property rates, is effectively acting in the same manner as a price gouging retailer.

 

Ratepayers are being ripped off. Shame on our price-gouging council.

 

Bruce Francais (pictured)

Katherine

 

[ED – The Alice Springs News is offering the right of reply to the council.]

 

 

 

Be Sociable, Share!

A new way to support our journalism

We do not have a paywall. If you support our independent journalism you can make a financial contribution by clicking the red button below. This will help us cover expenses and sustain the news service we’ve been providing since 1994, in a locally owned and operated medium.

Erwin Chlanda, Editor


One Comment (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Mark Wilson
    Posted January 25, 2020 at 10:00 pm

    Councils it seems start by setting a budget, then “do the math” to set the requisite multipliers to raise the required income.
    It’s a bit like setting the price of (say) corn flakes based not on the price of corn and production costs, but on maximising the potential income before the consumers switch their choice of cereal.
    Or more bluntly how much can you gouge before there’s a groundswell and the council is swept out with the incoming one, repeating the process?

    View Comment

Post a Comment

Your email is never shared. Required fields are marked *

*
*