Greedy councils gouge families
Daily Telegraph, 6 Nov, 2006
Kelvin Bissett

COUNCILS are madly rushing to exploit new taxing powers on building works including renovations, pergolas and swimming pools with one council already drafting plans to double charges.

An investigation by The Daily Telegraph shows at least 19 councils have moved to apply the 1 per cent flat tax levy, which was intended to apply only to large development when enacted last year.

Fairfield Council expects to raise $1.7 million a year from a levy on building work approved between $12,000 and $1 million.

The levy potentially would add another $2000 to a $200,000 home built on land where expensive Section 94 fees have been paid in the past, leading to claims of double dipping.

The number of councils taking up the levy has grown since Planning Minister Frank Sartor demanded an report from bureaucrats after this newspaper on September 7 revealed Kogarah Council's decision to tax minor building work.

He promised to "call in" councils who overstepped the mark – but nothing has happened.

A spokeswoman for Mr Sartor said last night the review was "close to being finalised".

At least 19 councils have put in place plans to cash in on the levy with varying thresholds and exemptions.

Many councils have opted to apply the levy on building work with no minimum value, including Canada Bay, Kogarah, Waverley and Woollahra.

The rush to cash in on the new tax has spread, with Cowra, Cooma-Monaro, Junee, Murray and Mid-Western also having no minimum threshold.

The Housing Industry Association is furious that Wollongong Council announced plans to double the tax, imposing a 2 per cent tax in its town centre.

Wollongong has decided to apply the levy only on developments costing more than $1 million, but the HIA said this cost would be passed onto apartment buyers.

HIA executive director Graham Wolfe said yesterday he hoped Mr Sartor would intervene quickly.

"We are hopeful the report Mr Sartor has requested will recommend the levy not apply to 'mums and dads' and the minister will respond accordingly," Mr Wolfe said.

Fairfield Council Thang Ngo said he was surprised his council wanted to apply the new tax as the council had not spent millions raised in existing Section 94 levies.

At the beginning of the year the council had more than $21 million in the bank.

"I can't see why we are going ahead with this – we are struggling to spend what we have already raised," he said.

State Government permission is not required to apply the levy, however Mr Sartor has the power to step in if required.