E LAW - MURDOCH UNIVERSITY ELECTRONIC JOURNAL OF LAW
VOLUME 1 NUMBER 4 (DECEMBER 1994)
Copyright E Law and/or authors

Review of Western Australian State Taxes 1994
Chapter 8 REVIEW OF LOCAL GOVERNMENT TAXATION

Introduction
The Functions of Local Government
The Changing Face of Local Government
Land Value Rating as Taxation
The Rating System
Rating and Equity
Finding Alternatives
The Personal Element
The UK Experience
Conclusion
Bibliography

INTRODUCTION

The existing pattern of local government taxation in Australia reflects the
limited responsibilities assigned to local authorities by the States. Local
government's role has traditionally been described in terms of the three
Rs: rates, roads and rubbish.

Ignored as a government level in its own right in the Commonwealth
Constitution, local government has been established by virtue of State
legislation such as the Local Government Act 1960-1982 (LGA) in Western
Australia.

In 1991-92, local councils in Western Australia raised only 43.5% of what
was required for their own purpose outlays from the single tax base of
property rates.[1] As a result, the revenue raising capacity of local
government has been criticised as being unduly narrow and restrictive. The
question of how local government might improve the efficiency of its
current tax base, widen its taxation powers, and whether a move towards
alternative forms of revenue raising can be justified forms the basis of
this chapter.

The Functions of Local Government

The three Rs fail to accurately describe the role of local government in
modern society and the diversity of services it provides. Local government
in Australia was originally set up to provide services to real property,
mainly in the forms of roads, bridges, and garbage collection and disposal.
Nowadays, however, local government services extend to the regulation of
building, to town and environmental planning, public order and safety, and
the provision of cultural, recreational, educational, welfare and health
amenities.[2] According to conventional fiscal federalism theory, services
associated with social security, health, and public order are the very type
that local government should be providing.[3] Over the past ten years, the
underlying aim of personal welfare services has undergone a fundamental
change from curing to prevention, and from maintenance to development.
Consequently, these services are understood now as being an integral part
of local community development.[4]

The Changing Face of Local Government

Local government expenditure on social welfare services has increased from
4.5% in 1982 to 6.6% in 1991-92.[5] The increase is attributed to two main
factors. The resurgence in interest in local government activities by the
federal government, and amendments to the LGA.First of all, local
government has been regarded by the Commonwealth since the early 1980s as a
community-based organisation eligible to make submissions for funds under
various health, welfare and recreational programs.[6] This policy provides a
mechanism whereby the federal government can bypass the States in devolving
funds directly to the community. Secondly, amendments to the LGA have
empowered local authorities to appropriate moneys out of their municipal
funds towards the provision of counselling, refuge services, and child and
youth care.[7] Thus, local government's role has broadened along with its
financial commitment. The same cannot be said of its revenue-raising
capacities.

Aside from rates levied on property, other sources of local government
revenue include local fines and fees, enterprise income, interest,
borrowing and net movements in investments, cash and securities, and grants
from other levels of government.[8] However, many of these revenue sources
are limited in both scope and capacity for further exploitation by local
government. For example, local government trading enterprises are typically
confined to providing goods and services such as caravan parks and
quarries, which are not favoured by private enterprise and which return
limited profits.[9]The Commonwealth contribution to local government
commenced with the enactment of the Commonwealth Grants Commission Act 1973
and payment was in the form of a specified proportion of personal income
tax revenue. This changed in 1986 with the passing of the Local Government
(Financial Assistance) Act 1986 (Cth) which provides for untied financial
assistance grants via the States to local government.

Since the introduction of financial assistance grants, however, the annual
federal budget allocation to local government as a percentage of personal
income tax has actually fallen from 2% in 1985-86 to 1.32% in 1988-89.[10]
Declining financial support from other governments is but one of the
reasons why local government must increasingly rely upon its own abilities
to raise revenue, and more specifically, upon property rates.The historical
reliance on property by local government as a means of raising revenue was
seen as appropriate. The ownership of property and land reflected to a
marked degree a person's wealth. Moreover, moneys raised from
property-based revenue were primarily channelled back into the maintenance
and provision of such property. Representation on local government,
therefore, was directly linked with the ownership of property.[11] However,
local government tax revenues from municipal rates have not kept pace with
economic growth indicated by gross domestic product (GDP). State government
land tax yields have increased significantly as a share of GDP from 1.8% in
1950 to 5% in 1990. Municipal rate revenues, however, have declined from 1%
to .9% as a share of GDP over the same period.[12]The decline in tax yields
suggests that local government needs to access a tax base with growth
potential. At the same time, it reveals a reluctance on the part of
councils in general to increase the amount of revenue they derive from
property tax. Not only is the ability to increase revenue from rates
constrained by taxation policies of State and federal government,[13] but
rates constitute an unpopular form of taxation, aggravated by high
visibility in the annual rate bill. Local government authorities are
understandably reluctant to further exploit property tax as a means of
meeting their financial commitments.[14]

Sources of Local Government Revenue

Taxation on property values is referred to as a `rate' in the LGA. If the
classical definition of what constitutes a tax is examined, however, rates
fit squarely within its parameters. Rates are the compulsory exaction of
money by a public authority for public purposes, enforceable by law. They
are not payments for services rendered.[15]In practice, the distinction
between a tax and a rate would be of little consequence except for the fact
that many ratepayers do not perceive property rates as a tax. This
perception is perpetuated by the seeming nexus between rates paid and the
benefits received. As has been pointed out, moneys raised from property
rates in Australia have historically been channelled back into property one
way or another. So garbage collection and disposal, for example, is a
service provided to property owners through the payment of rates. In this
sense, rates are regarded by the public as a payment for services rendered.
However, not all local government services are provided individually to
ratepayers, nor do they provide benefits to all ratepayers.[16]The majority
of taxes are unrequited, which makes it is difficult for a taxpayer to make
a connection between the tax paid on X and any benefit received. Local
government itself perceives the local rate on property as being distinct
from your average `Sheriff of Nottingham take from the poor and give to the
rich' tax. However, as local government expenditure on services unrelated
to property increases, the local rate on property becomes less requited and
more in the nature of a classical tax.

Having discussed the basic machinery of local government taxation in
Western Australia, we will now assess the local rate on property values in
terms of equity, efficiency and simplicity.

Land value rating as a form of taxation: the two sides of equity,
efficiency and simplicity.[17]

EQUITY

Advantages

Approximate benefit derived

A tax should be fair in relation to the benefit a taxpayer receives from
the expenditure of the tax. Property rates can be justified on the basis
that local government funding is primarily devoted to providing services
that have a high relationship to property. Cultural recreation amenities
also provide an indirect benefit to property owners by making their area
more attractive.

Approximate capacity to pay

According to the notion of vertical equity, a tax should be borne more
heavily by those with a greater capacity to pay. Arguably, it is those
people with a greater overall wealth who own the most valuable properties.
The calculation of rates on the basis of land values therefore will mean
those people with the greatest capacity to pay will be paying the most
rates.

Approximate use of a tax base

Along with State land tax, local government rates are one of the few taxes
on assets as opposed to income; some proportion of taxation of assets is
appropriate if people are to be taxed according to their capacity to pay.

Objectivity

The use of land values provided by a State government department means that
an objective measure is used to determine the basis for rates. This in turn
encourages cross jurisdictional equity amongst ratepayers by eliminating
the risk of individual councils distorting land values for their own
revenue-raising purpose.

Disadvantages

Unsatisfactory match with benefit received

Whilst property owners are taxed, other members of the local community who
also derive a benefit from the council's activities may not be taxed, ie.
non-ratepayers who utilise parklands or libraries within the municipality.
The property owner is virtually called upon to finance all local-government
activities, irrespective of the nature and extent of the service given.

Unsatisfactory match with capacity to pay

In order to achieve vertical equity, there needs to be a correlation
between the higher rates of the tax and the ability of the taxpayer to pay
the tax. However, wealth can be held in many forms other than land, and as
such it cannot be said that this correlation necessarily exists. Land
values have no regard to the owners debt position or low of income.

Tax on assets causes hardship

A tax on assets, especially on such a common asset as land, is harsh on
those people who may be income poor and asset rich (such as retired
people). Inequities, measured by capacity to pay, occur where certain areas
are subject to escalation of property values not matched by increases in
real income levels.

Local government discretion

The rate set by local government is ultimately determined on the arbitrary
basis of the income it requires to finance expenditure. Ratepayers in
different municipalities can therefore expect to pay rates according to the
revenue-raising needs of their respective councils. In this sense,
objective land values are only illusory.

EFFICIENCY

Advantages

Immobility of the tax base

The lack of mobility of the tax base (land) makes property rates a suitable
tax for small, local jurisdictions. Because of the immobility of the tax
base, property owners will not be liable to shift geographically in
response to differences in tax rates between localities.

Revenue potential

Land value taxation is economically efficient in that it is broadly based
and yields significant revenue for local government.

Revenue predictability

The revenue yields of land value taxation are generally of a readily
predictable amount. This enables both local government and property owners
to arrange their finances and resources with some certainty.

Property ownership discouraged

It is arguable that people will choose to invest their moneys in assets
less heavily taxed than land. Property rates, along with land tax and stamp
duty, impose a heavy tax burden on property owners. Even if people do
decide to invest their moneys in land, they may be more inclined to do so
in a local government area which traditionally charges low rates, or which
applies the differential rating system.

The statistics

Statistics indicate that whilst local rates raise significant revenue, they
also exhibit the least buoyant revenue yields in comparison to real revenue
yields of stamp duty and land tax. Furthermore, as numerous properties are
exempt from rating under the Local Government Act, the full revenue-raising
capacity of local government is not realised.

Unpredictable revenue yields

Land values may be unpredictable from year to year, particularly in rural
areas where fluctuating weather conditions and macro-economic factors
impact heavily on the value of income-earning land.

SIMPLICITY

Advantages

Avoidance is difficult and the tax simple

Because ownership of land is regulated by the State, avoidance of rates is
effectively impossible. The tax is readily recouped in the event that rates
are not paid; land, being immobile, is easily claimed by authorities. This,
combined with the fact that a tax on land value is simply calculated, means
that administration costs are far less than for forms of taxation where
collection and enforcement would be more difficult.

Increasing complexity of the tax and use of resources

Valuation is not as simple as it may initially appear. The introduction of
differential forms of rating, exemptions from property valuation, dual
systems of rating, deferred payment of rates, discounts and rebate schemes
means that the tax is both complicated and made difficult to administer.
Furthermore, the process of valuation involves significant use of
resources, thus expenditure is necessary for the provision of regularly
updated valuation of properties.

As demonstrated, raising revenue by means of property rating has
identifiable advantages and disadvantages. Moreover, inferences can be
drawn with regard to issues of equity, efficiency and simplicity. Whilst it
is apparent that amounts raised are insufficient to meet expenditure, the
system is efficient because it still raises significant revenue and remains
simple to administer. The question of whether property rates operate
equitably, however, is more problematic. An examination of the rating
system provides a better understanding of property tax with respect to
equity.

The Rating System

The rating system is contained in two pieces of legislation, the LGA and
the Valuation of Land Act 1978 (VLA). Rating is based on the property
valuation of rateable land which is conducted independently of local
government by the State valuer-general's department.

Section 532 of the LGA defines all land as rateable, except that which is
exempted. Exemptions include:

1. Crown land used for a public purpose or which is unoccupied or vested
under the Parks and Reserves Act or is used for horticultural shows or
recreational purposes.

2. Land belonging to a religious body used or held as a place of public
worship.

3. Land used exclusively as a public hospital, school (both public and
private), library, museum.

4. Land used for charitable purposes.

The owner-occupied residence is not exempt. The rating system applies to
owners of residences as well as to owners of land used for commercial
purposes.

The formula used for calculating property tax appears reasonably simple.
Each local council determines how much money it needs to raise, subtracts
the revenue expected from other sources such as general purpose grants,
fees, fines, and so on, and then divides that by the total property
valuations of the local government area.[18]

Case in Point

The City of Bunbury has calculated the following rate for the 1993-94
financial year:[19]

Total valuation of properties
$  82,000,000
total revenue required
$  23,000,000
revenue from other sources
- $  17,200,000
requires rate revenue
$   5,800,000

$82,000,000 divided by $5,800,000 = 7
Therefore, the rate set by
Council = $ .07 per $1.00

Examples

1. Ms Smith's property, based on a GRV[20] of $10,000, will yield .07 x
10,000 = $700.

2. Ms Jones' property has a GRV OF $25,000. She will pay .07 x 25,000 =
$1,750.

Family circumstances in the above examples may be entirely different. Ms
Jones may be a single person without dependants, on a high income and
debt-free, whilst Ms Smith may be a single parent with two dependant
children, on a moderate income and with a mortgage. Whilst the rate is
assessed on the ad valorem value of the property, they will both pay the
same rate in the dollar, regardless of their cash flow or their household
income.

Two valuation systems are available to local government under the LGA.
Gross rental value (GRV) is the annual rental that a property could be
expected to realise and is generally applied to urban land. Unimproved
value (UIV), which is the system used by shire councils in rural areas,
refers to the amount that a property could be expected to realise upon its
sale without taking into account the value of any improvements.[21] Many
councils operate dual systems. The GRV system recognises the income-earning
potential of a property and is therefore appropriate from a revenue raising
perspective. Further, as developed urban properties tend to use council
services to varying degrees, the GRV system taxes more heavily those
property owners who get most benefit from council. For example, a single
residence located in proximity to a high rise block of units would have a
similar unimproved value as the entire block of units. But the application
of GRV redresses this distortion. It ensures that the rate burden falls
more heavily on the owner of the high rise units, the tenants of which
collectively use more services than the residential property owner.

By applying differential rates based on different land zoning, local
authorities can go even further to correct possible inequities in the
sharing of the rate burden. Differential rates recognise that commercial
and industrial properties have greater earning capacities than residential
land.[22] This device also provides for specified area rates whereby certain
properties are likely to enjoy particular benefits, such as a sewerage
scheme, from council. Councils are permitted to set minimum rates to ensure
that all rateable properties make a reasonable contribution irrespective of
their valuation.[23] Certain restrictions apply to minimum rates, however. A
council is not permitted to use the minimum rate as a device to effect a
flat charge per property and thus replace the ad valorem system which
recognises that those with higher property values pay higher rates.

In acknowledgment of the potential hardship to pensioners who may
asset-rich but income-poor, the State government, under the Rates and
Charges (Rebates and Deferments) Act 1992 provides for rates concessions in
two ways: the 50% rebate, which is reimbursed to local council, and payment
deferment. The latter allows for payment of rates to be deferred until such
time as the property is settled, with the State government paying interest
on the deferred monies. The significance of this is that pensioners are
relieved of the burden of paying rates until they dispose of the property.

The rate schedule imposed by the City of Bunbury is more complicated than
it would appear at first glance. The minimum rate is $275.00 per
residential property per year. Seven cents in the dollar translates to:

1. Residential zone: 6.49 cents;

2. Commercial zone: 6.85 cents;

3. Specified Area Rate (to provide parking in the Central Business
District): 0.42 cents.

Rate variation indicates the flexibility provided by the LGA for councils
to determine their own financial needs. It also suggests the potential for
large discrepancies between councils in the application of the rating
system.

Rating and Equity

A council's ability to shift the tax burden from one set of ratepayers to
another purportedly achieves equity. However, in many respects, the tax is
not equitable and would appear to be unfairly imposed on constituents who
have least ability to pay.

As was explained earlier, the property tax makes no distinction between the
income-earning capacity of Ms Smith and Ms Jones. During the late 1980s
councils became concerned that the ability to pay rates did not necessarily
equate with property value. A study of forty-four collector districts in
Western Australia in 1989 confirmed that there is no strict correlation
between high property values and high income, and that there are some areas
which have proportionally high property values but lower incomes.[24] Studies
also indicate that rates, as a percentage of household disposable income,
decline as a person's income capacity increases.[25] This is in contrast to a
progressive tax system where the more a person earns, the more she pays.
With a property tax, then, the more a person earns, the less she pays in
proportion to her income. If regressivity occurs where the incidence of the
tax falls more heavily on people with low incomes, property tax is
potentially regressive because it does not take into account a household's
disposable income.Local authorities exercise discretion to shift the burden
amongst ratepayers by rating business and commercial property owners higher
than residential property owners. This purportedly achieves equity. However
it can be argued that the tax burden is shifted onto consumers of council
goods and services, many of whom are non-property owners with less ability
to pay. The incidence of burden shifting is largely hidden, however, and
the community has no way of identifying the role that rates play in the
structure of prices.[26] The position of landlord and tenant illustrates this
point. A landlord can transfer the rate burden to the tenant in the form of
rental costs. As rates on business can be legitimately claimed against
income tax, the general taxpayer, including the non-property owner,
compensates for the revenue foregone. The value of the transfer can be of
great financial significance to the commercial property owner, who is
likely to be paying a higher marginal tax rate.[27] Thus, because commercial
ratepayers are able to shift the rates burden onto consumers, the
differential rating system does not necessarily achieve equity.[28] The
system is even more unfair to pensioner tenants because rebate schemes are
available only to property owners.[29]

Finding Alternatives

To summarise, property taxation raises inadequate revenue and does not
distribute the taxation burden in an equitable manner. The purpose of
reform, then, should be to increase the potential for revenue raising, and
to bring about equity. Reform options which will now be examined focus on
the inclusion of a personal taxation element. These take the form of an
income tax and a poll tax.

The Personal Element

The imposition of devices which have been developed overseas for personal
taxation are poll tax and local income tax. Poll tax can be described as a
flat rate levied upon every member of the community who is on the electoral
roll.[30] In WA, any person over eighteen years who owns or occupies a
rateable property is eligible to vote in local elections whether or not
they hold Australian citizenship.[31] This group would be the likely target
for a poll tax. Advocates claim that poll tax would be fairer than property
tax alone because: 1. All who benefit from council expenditure are liable
to contribute.2. Services provided by local government are related more to
personal needs than to property.3. The rating of land disadvantages those
whose properties are valued at a high level on account of factors not
specifically related to local government services.4. All people in the
council area have a right to benefits, not just property owners. 5. Since
all voting adults are liable, the tax becomes more visible and this in turn
makes local government more accountable.[32]

Detractors, on the other hand, point out that with a poll tax:

1. There is no regard for personal circumstances, capacity to pay or the
value of one's assets or income.2. Implementation and collection of revenue
is difficult.3. The fact that local government services are still
predominantly property related is ignored.4. Such fundamental change leads
to widespread anxiety and concern. 5. It is necessary to implement two
systems since poll tax is not appropriate for non-domestic properties.

6. Administrative costs are prohibitive.[33]Poll tax has not been imposed in
Australia, except in Victoria.[34] Historically it was perceived that
complications in collection would arise due to the large migrant and
transient populations.[35] Recently, however, the United Kingdom experience
sheds light on other difficulties.

The UK Experience

Poll tax was imposed with disastrous effect in the late 1980s and has been
blamed for the downfall of Margaret Thatcher and for upsetting an already
fragile sense of social cohesion.[36] Strathclyde Council, for example, spent
sixteen million pounds setting up the infrastructure for collection,[37] and
in the end, non-compliance and enforcement cost most councils ten percent
of the amount collected.[38] Unforeseen legal problems also resulted from the
tax. Defaulters were struck off the electoral roll, and thus
disenfranchised; council authorities issued summonses daily in their
thousands to defaulters; non-payment, while a civil offence, was covered by
criminal provisions in the Act and civil procedure broke down as millions
of defaulters clogged the courts, with cases backlogged for years;
magistrates resigned claiming they were forced into acting as tax
collectors and the courts were being made a laughing stock as defendants
made political speeches and disrupted proceedings.[39]

Poll tax quickly gave way and modified schemes took over.[40] These schemes
redefined rateable assessment, merging the personal and property elements.
A model was imposed which was a flat rate based on a two-adult household,
with exemptions for singles, and a percentage of the property's capital
value was added. Problems arose in establishing a reliable method to verify
the existence of a single adult household. Furthermore, many properties had
greatly appreciated in value over the years while their owners' incomes did
not keep pace. The rate could vary greatly between councils depending upon
the level of the council's expenditure.[41] It is clear that poll tax was a
failure, presenting great difficulties in collection, and that property
rates had to be reintroduced in an attempt to provide a more reliable
base.A second option, personal income taxation, will now be examined.
Income tax surcharges on behalf of local government have been dismissed by
some analysts as inappropriate. They cite the following reasons:

1. Local government authorities do not possess the legal power to impose an
income tax or to ask the Commonwealth to impose or collect such a tax on
their behalf.

2. State governments would be unlikely to grant local government such
powers or to request on their behalf that the Commonwealth levy such a tax.

3. The Commonwealth is precluded by s99 of the Constitution from
differentiating between States or parts of States in the imposition of
taxes so that any surcharge would have to be uniform throughout Australia
unless the Commonwealth acted merely as collecting agent.[42]

However, other analysts do not acknowledge the veracity of all these
arguments and hold that:1. The surcharge could be assesed and collected
locally, or assessed locally and collected by the Commonwealth. 2.
Alternatively, local income tax could indeed be set uniformly at either
national or state level and collected by the Commonwealth.[43]

An alternative to taxing the individual would be to tax household income
utilising the national census data collected every five years by the
Australian Bureau of Statistics. However, household income varies with
factors such as family size, stage of the life cycle, labour force
participation, and geographical location.[44] The fact that people's
circumstances change more frequently than property values means that
five-yearly assessment would unreliable. The cost of continuous assessment
would be beyond the resources of local government, and the Commonwealth
would be hard pressed to conduct a yearly census having regard to the
enormity of expense and resources involved.

CONCLUSION

The abandonment of the property element cannot be contemplated as a viable
option. To reiterate, the property base is reliable, raises significant
revenue, and the public is used to it. The advantages of maintaining the
property rating system far outweigh the disadvantages in terms of
efficiency and simplicity.

If the system of rating property were abandoned in favour of a personal tax
base to bring about equity, then efficiency and simplicity would be lost
due to more complex assessment, collection and enforcement procedures.
Notwithstanding the obvious benefits of raising large amounts of revenue by
imposing a local income tax, it is submitted that the notion is impractical
in Australia. Since the Commonwealth has effectively removed income
taxation power from the States, it is most unlikely to devolve it to local
government.

BIBLIOGRAPHY

ADVISORY COUNCIL FOR INTER-GOVERNMENT RELATIONS, Discussion Paper 4,
`Additional Revenue Sources for Local Government, 1981, ACIR, Hobart. [An
overview of local government in 1981.]

ADVISORY COUNCIL FOR INTER-GOVERNMENT RELATIONS, Report 7,
`Responsibilities and Resouces of Australian Local Government, 1984, AGPS.
[Canvases ways and means of raising funds.]

AISBETT, ALAN AND JULIE LOMAS. `Council, Son of Poll Tax', Solicitors
Journal vol 135 no 20, 24 May 1992, p630. [update on recent revision of
local government taxation in UK.]

AUSTRALIAN URBAN AND REGIONAL DEVELOPMENT REVIEW, Discussion Paper No 1.
[Examines issues of capacity to pay local government rates.]

CITY OF BUNBURY 1993-94 Financial Year Budgets. [Useful analyses and
tables.]

Councillors' Manual (Supplied by the Country Shire Councils Association of
WA Inc), 1988, Department of Local Government. [Excellent source of
procedures and explanations of rating system.]

`Debating the Rating' Local government Bulletin vol 44, no 5, June 1989,
p2. [Brief discussion.]

EVATT RESEARCH CENTRE Breach of Contract: Privatisation and the Management
of Australian Local Government, Leichhardt NSW: Pluto Press 1991. [Good
source of information about duties and responsibilities; historical
information.]

LOCAL GOVERNMENT ASSOCIATION OF WESTERN AUSTRALIA, `Assessing Capacity to
Pay Local Government Rates' special conference minutes, Perth 1989. [Text
of papers presented by councillors, etc.]

`Local Government Revenue Raising Capacity' National Institute of Economic
and Industry Research, Melbourne (no date).

MOWBRAY, MARTIN, `Rates, Roads, Rubbish & Redistribution: the Politics of
Local Taxation' Journal of Australian Political Economy vol 11, Jan 1982
p73. [Comparative analysis; informative.]

NATIONAL INSTITUTE OF ECONOMIC AND INDUSTRY RESEARCH `Local Government
Revenue Raising Capacity' discussion paper, Melbourne (no date).

OAKES, NORMAN (chairperson), Report of Committee of Inquiry into Local
Government Rating and Other Revenue Powers and Resource, April 1990,
Sydney.

REES, KATHRYN, `The State Deficit Levy Act' Law Institute Journal vol 67,
April 1993, p272. [Analysis of Victorian `poll' tax.]

`Taxation Choices for Community Value: conference proceedings' Australian
Municipal Journal vol 71 no 1051, August 1991, p11.

THOMAS, G. `From McKenzie Friend to Leicester Assistant: the impact of the
poll tax' [1992] Public Law 208. [Discussion of revenue raising and the
impact of poll tax upon the legal system in the UK.]

THOMSON, NORMAN, `The revenue raising capacity of local government: the
ratepayers or their property?' The Australian Quarterley vol 53-54, Spring
1981, p343. [Informative.]

`UK Looks to Poll Tax' Local Government Journal vol 15, no 3, 1989, p25.
[Foreshadows negative impact of the scheme.]

WESTERN AUSTRALIAN MUNICIPAL ASSOCIATION `Taxation Reforms: Choices for
Local Government' discussion paper, Perth 1991.

Notes:

[1] Australian Urban and Regional Development Review Discussion Paper No.1, p
3.

[2] Evatt Research Centre, Breach of Contract: Privatisation and the
Management of Australian Local Government, Pluto Press, Leichhardt NSW,
1990, p 15.

[3] supra n2 p 27.

[4] Advisory Council for Inter-governmental Relations, Report 7
Responsibilities and Resources of Australian Local Government, 1984, p 37.

[5] supra n1 p 3.

[6] G.A.Wood, `How do Australian State and Local Governments Tax Residential
Housing?', Australian Tax Forum, v.9, 1992, p 14.

[7] s.446 Local Government Act 1960-82 (WA).

[8] Oakes, N. Report of Committee of Inquiry into Local Government Rating and
other Revenue Powers and Resources April 1990, p 5.

[9] The National Institute of Economic and Industry Research, Local
Government Revenue Raising Capacity, Melbourne (no date), p 82.

[10] supra n2 p 58.

[11] supra n3 p 12.

[12] Western Australian Municipal Association, Taxation Reform: Choices for
Local Government discussion paper, Perth 1991, p 3.

[13] supra n3 p 8.

[14] Ibid p 36.

[15] Matthews v Chicory Marketing Board (1938) 60 CLR 263, per Latham CJ at
270.

[16] Air Caledonie International v Commonwealth (1988) 82 ALR 385, per the
Court at 391.

[17] supra n3, p 34-36.

[18] Councillors Manual (Supplied by the Country Shire Councils' Association
of W.A. Inc.) Dept. of Local Government, 1988. Appendix: `The Local
Government Rating System', p 2.

[19] City of Bunbury 1993-94 Financial Year Budgets p 47. Figures
approximate.

[20] Gross Rental Value.

[21] Valuation of Land Act 1978 (WA) s4.

[22] LGA s548(4)(b).

[23] LGA s552.

[24] Local Government Association of Western Australia, Special Conference
1989 Assessing Capacity To Pay Local Government Rates, Minutes, pp 16-26.

[25] Mowbray M, `Rates, Rubbish & Redistribution: the Politics of Local
Taxation', Journal of Australian Political Economy , 11 January 1982, p 80.

[26] supra n3 p 33.

[27] supra n27 p 77.

[28] supra n3 p 31.

[29] supra n27 p 83.

[30] supra n18 p 19.

[31] LGA s35.

[32] supra n3 p 73; n18 p 19-23.

[33] ibid.

[34] The State Deficit Levy Act 1992 (Vic) is not actually a device for
raising local government revenue; it is a $100 a year levy imposed on each
Victorian ratepayer to raise revenue of $180 million a year. For
efficiency's sake, the levy is collected by local government, but the money
is handed over to the state for consolidated revenue. The question remains
whether local councils in Victoria will drop the levy or collect it on
behalf of themselves should the Victorian government ever decide to repeal
the Act.

[35] supra n18 p 19.

[36] G Thomas, `From McKenzie Friend to Leicester Assistant: the impact of
the poll tax' [1992] Public Law p 208.

[37] 'UK Looks to Poll Tax', Local Government Journal vol 15, no 3, 1989 p
25.

[38] A. Aisbett and J. Lomas, `Council, son of Poll Tax', Solicitors Journal
vol 135 no 20, 24 May 1992, p 630.

[39] supra n37.

[40] supra n39.

[41] ibid.

[42] supra n11 p 69.

[43] supra n3 p 78.

[44] supra n25 p 25.