Public Question Time Apparently is NOT Public Answer Time!

Why is it that a simple question at council does not get a simple, direct answer?

Over the past three years I have regularly attended Monash Council meetings and often asked questions in public question time. Council gives a “written response”.  The name “response” is apt because the “response” rarely is an “answer” to the question that is asked.

By way of example: on September 27, an amendment to Council’s Financial Hardship Policy was proposed and, while well intentioned, it offers benefits to one group of struggling ratepayers while denying the same to others in equally straitened circumstances.  I asked why this was.  The response was a long-winded, contradictory evasion. Judge for yourself.

The Proposed Policy Amendment

financialhardship

Extract from Monash Council Agenda – September 27, 2016

My Question To Council Tonight

Compassion for ratepayers suffering financial hardship is commendable; no question.

Imagine:

  • I have lived in Monash for 30 years.
  • 18 months ago I downsized near to Boyanna Rd.
  • 12 months ago (remember, we’re imagining), aged 57, too ill to work I invoked my income protection insurance (reduced income, no pension, huge medical bills).
  • 3 months ago revaluation doubled my CIV and increased my rates by 40%.
  • I qualify under council’s hardship provisions for interest rate relief on deferred rates (part 1 of the amendment).

Next door is an older, struggling pensioner who moved into Monash for the first time eleven years ago who qualifies for zero interest (part 2 of the amendment).

What is the difference in NEED between these two hypothetical ratepayers that warrants preferential treatment of one over the other?

Comments

The question is not critical of the idea that relief should be offered – in fact it applauds the concept.  The question points out the inequities based on the assumption that two ratepayers are both suffering extreme financial hardship yet they are treated differently:

  • I have no pension yet, hypothetically, I have no more disposable cash than the pensioner next door
  • I am not receiving any government assistance because I am funding myself through my own income protection insurance yet I am eligible for less public assistance than my neighbour
  • I have lived in Monash, paying rates, for 19 years more than the pensioner yet, having moved house recently, I am penalised in comparison
  • I am too ill to work yet, being younger, may well have more years ahead of me in which to accumulate a compounding burden of interest on my deferred rates jeopardising far more of the equity in my home

Council’s Response

Councillor Lake’s response on behalf of council (he has couched it in the first  person so I believe it fair to attribute it personally to him) follows below with embedded comments.

Thank you for your question.  At the outset, assuming both have applied for deferred payments under the proposed amendment, they would both be better off than under the current policy. My proposal, as set out in Item 7.2, is seeking Council approval to reduce the interest rate charged for the deferral of Council rates for persons qualifying under our Financial Hardship Policy. This represents a reduction from the current 4.75% to 2.5% per annum.  The current 4.75% rate which applies is already lower than the proscribed statutory rate of 9.5% and follows the development of Council’s current hardship policy which I instigated around two years ago.  So an interest rate of 2.5% on deferred rates would be the outcome for your hypothetical non-pensioner in the example you have proposed.  That is an interest rate substantially lower than anything else commercially available at the moment.

My question asked about the unequal treatment of two struggling ratepayers.  The fact that both get a reduced rate was never in question and the fact that both are better off than under the current policy does not address the inequity.

Commercial interest rates are irrelevant – governments are not commercial entities.  And the fact remains that, in these straitened circumstances, any interest rate compounds the debt accumulating against my property.  The question is not about whether or not a rates debt ultimately needs to be paid regardless of personal circumstances, it asked about the different treatment of two disadvantaged people.

In the proposed Notice of Motion I am also seeking  councillor support to reduce the interest rate charged on deferred rates for eligible aged pensioners to 0% where a person is over the age of 65 and can prove they have lived in their home for more than 10 years.

The latter approach recognises a person who has passed the current age in Australia when someone becomes eligible to apply for the Age Pension. This approach is proposed by me to offer residents of pensionable age an ability to live completely free of any concern around the payment of their Council rates.  This is in response to the dozens of pensioners I have spoken to over the past month, and the hundreds who have responded to Council’s petition to the state government, who have told me about the significant impact on their life arising from the significant rate increase they have received because of property values increasing substantially.

Being older doesn’t mean the financial hardship is greater.  Being an aged-pensioner (but not a disability or other pensioner) does not mean you’re, automatically, harder up.  Financial Hardship is a question of your ability to pay your rates bill without being put in a situation where you cannot pay for the necessities of life and neither age nor pension status change that.

The requirement to prove that a person has lived in their home for at least 10 years is also unfair.  In the example I cited, I was well and truly qualified on this count until I downsized.  After living in my own home for 28.5 years I downsized and, 18 months later, in serious financial hardship, I’m told I don’t qualify for help because I haven’t lived there for long enough.

Still the inequities, the subject of the question, is not addressed.

If my changes are supported tonight, aged pensioners with more than 10 years living and contributing to our community, can choose not to pay another dollar in rates and be completely confident that over time interest will not reduce the equity they have paid off in their home.  Their rates will simply sit as a charge against their property to be recouped by Council when the property is sold.  This in an option which will not be for everyone but it does offer immediate financial relief to anyone who is otherwise feeling they have no other choice but to leave the local area they have lived in for most of their life.

And there is the contradiction.

The hypothetical me in the example has lived and contributed to our community for nearly three times as long as the hypothetical pensioner but it’s the pensioner who gets the benefit described in this paragraph and the long term resident who misses out.  It’s the long term resident who, contrary to the comment above, may “have no other choice but to leave the local area they have lived in for most of their life”.

But what is even worse here is the underlying implication that compassion must first be earned – “…aged pensioners with more than 10 years living and contributing to our community…” are worthy or more care and compassion than others!

When it comes to council rates, age pensioner ratepayers are the most vulnerable section of our community because they are living off very low fixed incomes with little prospect of increasing their income in real terms in the future.  The proposed amendments will provide some immediate relief to some of those most in need.  This is in addition to our strong advocacy around these mattes to the state government and my proposal tonight represents assertive action we can take ourselves right now.

Pensioners are vulnerable.  Invalids are vulnerable.  The chronically ill, unemployed and many others are vulnerable.  They all live of very low fixed incomes.

It is true that the hypothetical me may recover and resume working and earning in which case I’d have to start to repay my deferred rates.  But I may have already been forced to sell up to escape an increasing and insurmountable interest burden despite having lived and contributed to the local community for most of my life.

So, I return the the question which was not answered:

What is the difference in NEED between these two hypothetical ratepayers that warrants preferential treatment of one over the other?

Why Can’t Citizens Get Answers?

When you consider the above example the only answer I can see is that there is no legitimate reason for the different treatment.  If it’s fair to charge one person 2.5% interest on deferred rates when they’re in financial hardship then it’s fair to charge everyone 2.5%.  If it’s fair to grant a 0% interest rate to one person then it’s fair to grant it to everyone.

And if that’s true then the answer to the question asked is very short and direct, “There is no difference in their needs, I will amend my proposal to recognise the unintended inequities”.

Time for a Change to Question Time

The final insult to the community in the above example is that my question was required to be kept to no more than 100 words (I got away with a few extra this time) but Council responses face no such restraint.  Cr Lake’s response used six paragraphs, about 500 words, to NOT answer the question.

 

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