Inquiry into rating of land affected by State Agreements

The Government has decided to conduct an inquiry into the rating of land affected by State Agreements.

Local Government Minister David Smith said today that the study would be additional to its ongoing inquiry into the valuation and rating of mining tenements.

"Disquiet has existed for some time amongst local governments which have large scale resource development projects subject to the Company/State Agreements Act," Mr Smith said.

"This inquiry will assess the impact of current agreements and provide the Government with a comprehensive overview of the situation.

"It could be that there will be no changes recommended to present arrangements.

"Another possibility is the application of Gross Rental Value ratings to mine sites and associated facilities.

"At the same time, other approaches could be recommended, depending on the inquiry's findings.

"Everyone agrees that it is appropriate for large industries to be given rate exemptions or advantages in their early stages as there are large revenue benefits to local authorities and the State from every new industry.

"The question is: how long should these exemptions and advantages continue after companies are making substantial profits and have paid off most of their capital investment?

"Some local authorities also argue that if they are not to get rates, then they should get some share of royalties."

Local governments have objected to controls imposed on their revenue options through the requirement for land covered by Agreements Acts to be rated on unimproved value and exempted from differential rates.

Normalisation of company towns in resource development areas has resulted in some local governments receiving payments from the companies to ensure continuation of the so-called 'supra-normal' quality of facilities in these towns.

Local governments believe they are being placed in a 'mendicant' position in negotiating with resource development companies on the level of payments for these facilities.

Grants to local governments from the WA Local Government Grants Commission have also been subject to adjustments because of the normalisation payments.

"The inquiry will bring perspective to these matters of contention," Mr Smith said.

"The inquiry panel's report to Government is expected in about six months."