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A local government requires Ministerial approval under section 6.33 of the Local Government Act 1995 (the Act) to impose any differential general rate which is more than twice the lowest differential general rate imposed by it. The rate-in-the-dollar
(RID) is the determinant.
The Minister will consider an application to impose a differential RID if the proposal is compliant with all legislative requirements and the Minister’s Rating Policy — Differential Rates. The Minister’s policy requires an application
to satisfy the following key values:
Once the budget deficiency has been ascertained (section 6.34 of the Act) in the context of the strategic community plan and corporate business plan, a rating strategy and proposed RIDs can be determined. Rates should not be increased by a fixed amount
without due consideration of the deficiency.
Using outdated property valuations from the Valuer General occurs mostly in the UV category and is when a local government applies for approval using outdated valuations. This does not give a true indication of the potential impact on ratepayers once
new valuations are received from the Valuer General and are multiplied by the RID.
If the following suggestions are adhered to there is an increased likelihood that no further action will be required for the application process:
Note: both options will require the adopted budget document to include the details from the public notice and the reason for the difference, in accordance with regulation 23 (b) of the Local Government (Financial Management) Regulations
1996 (the Financial Regulations).
The current public notice requirements for local governments took effect from 6 November 2020 through the gazettal of the Local Government Amendment Regulations (No.2) 2020.
The definitions of local public notice and statewide public notice have been amended in the Act to recognise alternative and contemporary means of communication. These are set out in Part 1A of the Local Government (Administration) Regulations 1996 (the
Local public notice will be given when notice is published on the official website of the local government and in at least three of the following ways set out in Administration Regulations r.3A :
Council approvals are required throughout the entire rates setting process and are to occur via resolution at a formal meeting of council. The Minister’s policy and application form outlines the resolutions required.
The council of the local government is required to review its expenditure and consider efficiency measures as part of its budget deliberations. This is to be reflected in the council minutes when it adopts the budget strategy and endorses objects and
reasons for each differential rating category and each minimum payment.
The objects and reasons must clearly explain why each differential general rate is proposed to be imposed and why it is proposed to set the differential general rate at that amount.
The timeline for rates setting is dictated by the Act. The following suggestions are based on these key dates:
The local government commences budget planning by reviewing the corporate plan and other relevant plans.
March/April — prepare draft budget — identify budget deficiency
It is good practice for council to adopt the proposed rate yield before advertising and include the rate yield in the advertising along with the proposed RIDs and a comment that any updated valuations will result in the RID’s being updated to achieve
the advertised rate yield.
Ensure the public notice is advertised on the website of the local government and in 3 of the prescribed ways.
The department has several guidance materials to assist local governments in the rate setting process, including those requiring Ministerial approval to impose a differential rate in the dollar, in accordance with section 6.33 of the Act.
Rating Policy: Differential Rates
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