After narrowly failing to convince a majority of councillors in the past, I finally succeeded at the April 2015 Council meeting to get Council to introduce a Council-funded pensioner rate rebate of $50.00.
The key rationale for proposing the introduction of a pensioner rate rebate of $50.00 is because the level of rate increases in Monash (like other councils) has risen above the cost of living since the mid-1990s. Monash Council has 13,501 eligible pensioner ratepayers which is nearly 20% of total residential ratepayers in Monash.
Despite Monash having Victoria’s lowest rates, our rate increases still have a significant impact on our ratepayers. However they hit pensioners the hardest who are living off fixed incomes which are subject to means-testing qualifications. The largest group of pensioners in Monash are those receiving the aged pension.
Introducing an additional pensioner rebate on top of what is already provided by the state government can also be justified because it recognises that many of our pensioners have lived in Monash for many years and have played a big part in making Monash the great place to live it is today. We should all be concerned that many pensioners are finding it increasingly harder financially to remain in their homes in Monash because of the growing size of the annual rates bill.
I want Council to do something to assist and that is why I am now proposing that we introduce a $50.00 rebate for all pensioners off their 2015/16 rates. We should want all pensioners to remain in Monash for as long as they want to live here and I propose we do something positive to assist that.
When municipal rate concessions were first introduced by the state government in 1973, the municipal rate concession was established at 50% of council rates with a ceiling of $40.00 per eligible pensioner. This ceiling was subsequently raised in 1980/81 to $120.00 and again in 1982/83 to $135.00 and had remained at that level for the next 23 years.
In 2004/05 the state government increased the ceiling to $160.00 and committed to adjusting the ceiling annually by CPI. For 2014/15 the amount is $208.00 which equates to only 16% of the average Monash rate.
There has been a rapid decline in the value of the state government’s municipal rate concession over time and this is most obvious within metropolitan councils such as Monash where property values and rates have increased significantly. For example, if the rebate had increased in line with CPI since 1982/84, it would be worth approximately $450 today – more than double its present value.
The pension represents the Australian social security ‘safety net’ which successive governments have put in place to provide a minimum level of welfare and assistance to the Australian community. It is appropriate that Council, should it wish to provide further relief for low, fixed income people living in Monash, adopt this same framework rather than seek to redesign some other criteria.
There are around 13,500 eligible pensioner ratepayers in Monash. This figure varies throughout the year as people move in and out of Monash and Centrelink or the Department of Veterans’ Affairs grants pensions and allowances. Budgeted rate revenue for 2014/15 for Monash Council is $100 million so therefore the cost of introducing a Monash Council sponsored rebate of $50.00 is approximately $675K. The funding of this rebate (0.675% of rates) will need to be incorporated into the total rate raised in the coming Council budget.
Council’s Strategic Resource Plan (SRP) target rate increase is 6% and therefore would require a theoretical increase to 6.675% although Council’s rate revenue would still only increase by the currently planned 6%. However, if implemented in conjunction with introducing a differential rating system as I am also proposing, then residential ratepayers would be limited to only the planned 6% rate increase with commercial/industrial rates increasing by around 10-11%. A differential used in this way would limit the overall rate increase to residential ratepayers to 6% and as currently planned by Council’s adopted SRP.
The objectives of introducing a pensioner rebate are to:
- address the impacts experienced by pensioners from rate increases over time that have outstripped the cost of living and increases to the pension;
- recognise the valuable contribution that many aged pensioners (by far the largest group of eligible pensioners) in Monash have made to making Monash the place that it is today;
- recognise that unlike others in our community, generally aged pensioners are unable to take any other steps to increase their income such as through working more or re-training;
- provide additional assistance on top of the state government municipal rate concession which has also eroded in value over time; and
- assist and encourage pensioners to remain in Monash in their homes for as long as they want to live here.
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