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A WA local government association wants organisations with a charity or not-for-profit status but who make money to start paying rates.
Last year $45.6 million of rates were foregone by local governments across the state, as groups such as churches, schools, and community organisations claimed rates exemptions.
The WA Local Government Association (WALGA) will ask the State Government to close what it calls a rates exemption loophole within the Local Government Act, which was placed under review last year.
Profit makers 'must pay'
WALGA president Lynne Craigie said organisations which claimed a charitable or not-for-profit status, but were turning a profit, must start paying their way.
"We now have a lot of organisations that claim a not-for-profit status, or a charity exemption, and that makes them entitled to exemptions from their local government rates.
"However some of those are running organisations at a great profit, and therefore should be paying their fair share towards the running of the community," she said.
"If it is a charitable organisation or an organisation that is purely not for profit and just providing a service, local governments have no intent to rate them.
Ms Craigie said councils should be given the ability to charge rates to profit-making organisations.
"So a small council that has churches can say, 'Okay, we don't expect rates from you', but an organisation that's a not-for-profit that has come into town to manage a shopping centre and is taking a profit from that, that should be rateable," she said.
CBH able to claim exemption, but makes ex gratia paymentThe CBH Group is a registered large charity which describes its work as helping people in rural, regional, remote communities.
It has 202 grain receival sites in regional shires across the WA Wheatbelt, but has plans to reduce that number to 100.
It turned a $91.3 million profit after tax and grower rebates last financial year.
Instead of rates, CBH pays a negotiated ex gratia payment to shires.
CBH declined to comment on WALGA's proposed changes to the Local Government Act.
The Wheatbelt Shire of Kellerberrin hosts a large CBH site whose capacity is understood to be approximately 350,000 tonnes.
Shire chief executive officer Ray Griffiths said CBH was the largest organisation to be exempted from paying rates in the shire, but the impact of its activities cost the council money, particularly in road repairs.
"The infrastructure that the CBH facility has got is quite significant, and we have people from all over the Wheatbelt travelling to use it," he said.
"The [feedback] that we get … from the Kellerberrin ratepayers [is that] our roads, especially the gravel network that comes in and feeds the main arterial routes, is … severely damaged.
"A lot of that damage that they're paying for is [from traffic] coming from outside of the shire.
Mr Griffiths said the shire also hosted churches which were exempt from rates, but the council had recently revoked the exemption from an aged care facility and residential facility.
He said the council had not done the figures on what CBH's rates bill would be if it lost its exemption, but he estimated it would be in the "high tens of thousands of dollars, possibly hundreds of thousands of dollars."
Instead CBH, makes an ex gratia payment of $26,000 for three bins located across the Kellerberrin Shire.
"Even if they paid millions of dollars it wouldn't go too far with the current road networks the way they are with the bigger trucks, but any increase would certainly help," Mr Griffiths said.
An 'unfair burden'WALGA president Lynne Craigie said exemptions placed an unfair burden on ratepayers.
"Local government is being cut back from every other sector of government, we're getting less funding from other levels of government than we ever have in the past, so we're required to provide more and more services to our communities," she said.
Ms Craigie said rates exemptions began as an incentive to attract charities and religious groups into communities.
"Any group that can prove that they are a not-for-profit or have a charitable arm can claim this status.
"They were traditionally places that didn't have a lot of income and a lot of money, and exemptions were made to give them a place in the community without great charges [put] … upon them.
"Over the years, that has changed," she said.
Ms Craigie said her organisation's proposed changes would be presented to Local Government Minister David Templeman via the act review working party.
Churches are among the groups that are not required to pay local government rates.
(ABC News: Mark Bennett)
This article first appeared on www.abc.net.au
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