Gunnedah’s revised special rate variation (SRV) proposal of 37.67 per cent over two years includes a reduced increase for all ratepayers except the mining category.
Its rates are forecast to rise by 85.13 per cent – more than double the original SRV proposed for all ratepayers.
Council said the mining category increase was in line with its initial round of community consultation which suggested the mining sector should pay a larger portion of council’s revenue base.
Whitehaven Coal’s recent submission to SRV consultation said the increase would place a “disproportionate burden” on the industry.
“Proposals for the mining sector to bear the disproportionate burden of cumulative rates increases of 85.13 per cent – extraordinarily beyond the rate peg of 5.6 per cent for 2024/25 set by IPART – appear to be based on the assumption that the mining sector has the capacity to bear this additional cost, and it will not have any unintended consequences,” Whitehaven’s submission stated.
“Mining has a significant positive economic impact on Gunnedah Shire. According to the 2022-23 NSW Mining Industry Expenditure Impact Survey, mining contributed $492.6 million in total gross value added in Gunnedah Shire and indirectly supported 4196 jobs. This contribution is equivalent to 66.8 per cent of total employment in the shire and around 44.5 per cent of the Gross Regional Product of the Local Government Area (LGA). Mining also contributes to the revenues of Gunnedah Shire Council indirectly through royalties via state grants, and directly through rates and planning agreements.”
The coal operator also noted the 120 per cent rate increased imposed on the company over four years from 2013-14 to 2016-17.
“Notably, council used the same arguments then as now that the increase will make the proportions of total revenue more equitable. However, Gunnedah shire experienced a 6.4 per cent increase in population between 2013 and 2023 –from 12,481 to 13,280 – and a decrease in the number of operating mines in the shire from 3 to 2 (excluding sites in rehabilitation).
“The rationale for increasing the proportion of total revenue from the mining category is unclear in circumstances where there are fewer operating mines, increasing the burden to be borne by each individual mine.
“It should be noted that Whitehaven is still paying mining rates on properties that are no longer in operation.
“While we are opposed to the proposed increase, it is worth emphasising we are not advocating for the mining sector to be treated like residential ratepayers – we recognise the important role we play in the region and we have demonstrated over the last decade that we are willing to pay disproportionately high rates in order to support the communities in which we operate.
“We remain committed to paying our fair share to the Gunnedah Shire Council, and all LGAs that we operate in. However, issues arise where governments at all levels put short-term gains ahead of long-term sustainability. This is equally applicable to council rates, state royalties and broader taxes.”
What the mayor said:
Gunnedah shire mayor Colleen Fuller described the special rate variation as a “difficult but necessary” process for council to undertake.
“While we recognise that, if approved by IPART, an SRV will be an added impost to any households or businesses that are struggling financially, the pressure will be lower in this revised SRV proposal for residential, business and farmland categories and higher for the mining sector than the original SRV scenario that we considered.
“It is also important to point out to our community that the impact will be partly offset by council’s resolution at its ordinary meeting in December 2024, that a freeze be placed on increases to Waste Management and Sewerage Annual Charges during the proposed Special Rate Variation implementation period.
“Council has also resolved to strive to find at least $930,000 through efficiency gains and operational savings over the next three years.”
What happens now?
Council will make applications for a Special Rate Variation and associated minimum rate increase to the Independent Pricing and Regulatory Tribunal (IPART).
Applications for the 2025-26 financial year are required to be submitted by February 3, 2025.
Following Council’s lodgement of the application by February 3, IPART will undertake further community consultation with a view to a determination in May or June.
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