AUTHORITY DIAGRAM FOR THE VICTORIAN TIER OF GOVERNMENT

1. THE PEOPLE – A PRIME GROUP OF 79 SUB-GROUPS THE CONSTITUTION AUTHORITY DIAGRAM FOR THE VICTORIAN TIER OF GOVERNMENT UPPER HOUSE ADMINISTRATION (Ministers) JUDICIARY LOWER HOUSE LOCAL GOVT. STATE COMPY. Water etc PUBLIC GOODS PRIVATE PERSONAL GOODS PRIVATE COMMUNITY GOODS

2. THE AUTHORITY LEVEL OF LOCAL GOVERNMENT • COUNCILS CANNOT MAKE LAWS. • THIS RIGHT WAS SOUGHT AT THE PROPOSED AUSTRALIAN CONSTITUTION CHANGE IN 1988. IT WAS REJECTED BY A TWO THIRDS MAJORITY OF THE ELECTORATE • COUNCILS CANNOT RAISE TAXES • THIS IS PREVENTED BY SECTION 62 OF THE CONSTITUTION ACT 1975 AND THE VICTORIAN CONSTITUTION AT SECTION LVI.

3. WHAT SOURCES DO COUNCILS HAVE TO RAISE FUNDS? • SECTION 64 OF THE CONSTITUTION ACT 1975 SETS OUT THREE METHODS OF FUND RAISING WHICH ARE NOT RATES AS A TAX. THESE ARE: • FINES AND PECUNIARY PENALTIES • FEES FOR LICENCES • FEES FOR SERVICES

4. COUNCIL RATES AND CHARGES • THE LOCAL GOVERNMENT ACT AUTHORISES COUNCILS TO IMPOSE RATES AND CHARGES COVERING A WIDE VARIETY OF SERVICES. • ALL THE RATES MAY BE APPLIED IN A MANNER WHICH AVOIDS THE LIMITATIONS OF s62 OF THE CONSTITUTION AND USES THE FREEDOMS OFFERED BY s64.

5. ENSURING RATES ARE NOT A TAX • THE PROCESS IS SIMPLE. • SEPARATE OUT ALL CHARGES INTO GROUPS OF BENEFICIARIES OF DIFFERENT TYPES OF GOODS. • EQUITABLY DISTRIBUTE THE TOTAL COST AMONGST THE PARTIES OR PROPERTIES WHICH RECEIVE THE BENEFITS AND CHARGE ACCORDINGLY. • THE DIFFERENT CLASSES OF GOODS ARE: • PUBLIC GOODS – OPEN TO ALL WHO NEED THEM • PRIVATE COMMUNITY GOODS – SUPPLIED TO ALL RATEABLE PROPERTY • PRIVATE COMMUNITY GOODS – SUPPLIED TO ALL OCCUPIERS • PRIVATE PERSONAL GOODS – SUPPLIED TO GROUPS AND INDIVIDUALS

6. WHAT ARE PUBLIC GOODS • THESE ARE GOODS SUPPLIED WITHOUT EXCLUSION TO THE MEMBERS OF THE COMMUNITY, SUCH AS: • MEALS ON WHEELS • WELFARE AND YOUTH SERVICES • CAROLS IN THE PARK ETC. • PUBLIC GOODS ARE SUPPLIED FROM TAXES AND DONATIONS

7. WHAT ARE PRIVATE COMMUNITY GOODS – PROPERTY? • THESE ARE SERVICES WHICH BRING A BENEFIT TO THE PROPERTY • ROADS ALLOW A CONNECTION BETWEEN THE PROPERTY AND OTHER PROPERTIES • DRAINS ALLOW THE UNWANTED EFFLUENTS FROM THE PROPERTY SUCH AS SEWERAGE AND STORMWATER TO BE LED AWAY TO APPROPRIATE POINTS OF DISCHARGE. • RATES MAY BE EQUITABLY DISTRIBUTED AMONGST THE PROPERTY OWNERS USING THE VALUE OF THE PROPERTY AS A MEASURE

8. WHAT ARE PRIVATE COMMUNITY GOODS – OCCUPIER(OFTEN REFERRED TO AS PRIVATE MUNICIPAL GOODS) • THESE ARE GOODS WHICH ARE PROVIDED TO ALL OCCUPIERS IN EQUAL MEASURE. • PARKS TO ALLOW PEOPLE TO SIT IN, KICK A BALL, WALK A DOG. • FREE CAR PARKS AT THE BEACH, ETC • AN EQUITABLE METHOD OF DISTRIBUTING THE COSTS TO PROVIDE AND MAINTAIN THESE GOODS IS BY AN EQUAL CHARGE FOR EACH OCCUPANCY

9. WHAT ARE PRIVATE PERSONAL GOODS? • THESE ARE GOODS WHICH PROVIDE A BENEFIT TO INDIVIDUALS OR GROUPS • THE MEASURE OF THE NATURE OF THE GOODS IS THAT THOSE WITHOUT MEMBERSHIP OF THE GROUP ARE EXCLUDED FROM THE BENEFIT. • EXAMPLES ARE SPORTS GROUNDS, TENNIS CLUBS, PARKS WHERE CITIZENS ARE LOCKED OUT BY GATES AND FENCES, CHILD MINDING CENTRES , PLANNING PERMITS, ETC. • THE EQUITABLE DISTRIBUTION OF COSTS IS THROUGH LICENCE FEES FOR PERMITS TO OCCUPY

10. WHAT HAPPENS WITH MIXED USE GOODS? • MANY SERVICES ARE SUPPLIED IN DIFFERENT MEASURE TO DIFFERENT USER GROUPS • THE FIRE SERVICES LEVY SHOWS HOW THE STATE DEALS WITH THIS ISSUE. • 12.5% OF THE CHARGE IS PROVIDED BY THE STATE OUT OF TAXATION – PRESUMABLY TO COVER THE PUBLIC GOODS ELEMENT. • 43.75% OF THE CHARGE IS PROVIDED BY A FLAT RATE CHARGE PER OCCUPANCY – PRIVATE COMMUNITY GOODS (OCCUPANCY). • 43.75% IS PROVIDED BY A CHARGE DISTRIBUTED ACCORDING TO THE CAPITAL IMPROVED VALUE – PRIVATE COMMUNITY GOODS (PROPERTY) • THIS IS CLAIMED TO BE A FAIRER SYSTEM!

11. WHAT PARTS OF THE LOCAL GOVERNMENT ACT APPLY? • s3C(2)(e) – to ensure that services and facilities provided by the Council are ACCESSIBLE AND EQUITABLE, and • s3C(2)(f) – to ensure the EQUITABLE imposition of rates and charges. • s208B(c) – each service provided by a Council MUST be accessible to those members of the community for whom the service is intended. • S208B(b) – subject to sections 3C(2)(b) and 3C(2)(e), all services provided by Council MUST be responsive to the needs of the community. • Note that s208B is part of the Best Value Principles (or user pays principle) which had to be implemented by 31 December 2005.

12. WHY DOESN’T THE SYSTEM WORK? • THE SYSTEM FOR LEGALLY SUPPLYING FUNDS IS CLEAR AND COMPREHENSIVE. • IT DOES NOT WORK BECAUSE THE CEO’S HAVE FAILED TO IMPLEMENT IT - GUIDED OF COURSE BY THE MAV (Municipal Association of Victoria)

13. A POSSIBLE ACTION PLAN - 1 • GROUP SOCIAL ACTION • REFUSE TO PAY THE GENERAL RATE BECAUSE IT INCLUDES CHARGES FOR SERVICES TO THE CAPITAL IMPROVED VALUE OF THE PROPERTY, THAT ARE NOT BEING DELIVERED TO THE PROPERTY. • REFUSE TO PAY ANY CHARGES WHICH ALLOW FOR THE PRACTICE BY COUNCIL OF RETAINING SURPLUS CONTRIBUTIONS IN AN UNALLOCATED RESERVE. • TRY TO SHOW EXAMPLES OF THE MISUSE OF FUNDS

14. A POSSIBLE ACTION PLAN - 2 • Write to the Council CEO advising that you are witholding payment until such time as you have a clear understanding of what the rates and charges actually buy and are legally incurred on behalf of yourself as an occupier and your property as a user of services. • Ask for a refund for the service fees wrongly charged to your account since 31st December 2005.

15. A POSSIBLE ACTION PLAN - 3 • Try to collect examples of incorrect charges in a previous year. • Try to understand where to find the annual surplus – listed in the Comprehensive Income Statement. • Look at the allocation of Materials and Services – listed in Bayside as Note 6. • Look at Cash and cash equivalents. Note 9.