It is the Chamber’s position that justification is required as to how different rate categories have been reached and determined, and where the revenue raised will go and how this planned expenditure differs across each category.

What are Differential Rates and why do we have them?

To comply with Section 6.33 and 6.36 of the Local Government Act 1995 and the City of Fremantle’s intended approach to continue to levy differential rates for the 2021-22 financial year, the City is required to publish an Objects and Reasons for Differential Rates paper located here.

Differential Rates means in simple terms, there is a different rate for different groups namely residential, commercial and industrial.

The council’s justification to introduce differential rates for the 2021-22 financial year, is to better reflect the costs associated across those different groups and improve and enhance those groups.

Breakdown of Differential Rates:

The City of Fremantle will apply differential general rates and minimum payments for the 2021-22 financial year as follows (Taken directly from the Objects and Reasons for Differential Rates Paper from Fremantle Council):

Rate Category Rate in the $ Minimum Payment
Residential Improved $0.084602 $1,388
Commercial and Industrial General $0.089890 $1,388
Vacant Commercial and Industrial $0.162689 $1,388
City Centre Commercial $0.097922 $1,388
Nightclubs $0.115945 $1,388
Vacant Residential Land $0.128111 $1,344
Residential Short-Term Accommodation $0.094477 $1,388

Objective:

  • The Chamber is committed to working with the City of Fremantle in ensuring its members are provided transparent updates on differential rates for the 2021-22 financial year, including clear direction on impact to local businesses.

Work Done to Date:

A statement outlining the objects and reasons for adopting the differential rates is available at www.fremantle.wa.gov.au/strategicdocuments or from the customer service centre.

Any submissions from electors or ratepayers on the proposed rates and any related matters were received, in writing, to the City by 5:00pm, Tuesday 8 June 2021

Chamber’s Position:

In particular, it is the Chamber’s position that the City looks at the following prior to confirming the rates for the next financial year:

  • While rationale is provided in the CoF guidelines, it remains difficult to assess the reasonableness of the rates without benchmark or any justification. We suggest these could be benchmarked against other metro municipalities to confirm reasonability and enhance transparency. If Fremantle rates are substantially higher than other metro municipalities, further justification is required. As part of this benchmark, it would be good to get an understanding on what other councils charge as a CBD differential rate.
  • The minimum rates are consistent across all categories. How many rate payers pay above the minimum? Should these minimum rates be more progressive?
  • Perhaps there could be incentives for Landlords who improve their properties in an effort to attract tenants, or those that fund tenant incentives (fit outs, rent free periods etc), and a penalty rate only levied if Landlords cannot demonstrate reasonable efforts to advertise/secure a tenant.
  • Is there a process to create further differentials across the commercial/industrial categories, in particular, should hospitality venues be charged the same rate as a retail business, or artist studio, pop ups and Farmers market vs fixed tenants, galleries vs professional services.
  • A high rate applied to short term accommodation discourages owners of such properties from complying with re-zoning requirements, particularly when not policed. This rate is also higher than the Commercial and Industrial rate, which doesn’t seem reasonable.
  • Given the economic climate with COVID and the impacts to tourism, tourism industries potentially will be further negatively impacted by the differential rate. What are the considerations on that front?

Photo Credit @cityoffremantle