KI Council Rates
AgKI need your support to lobby KI Council to re-introduce differential rates for Primary Production land. Over the last four years Primary Production rates have increased an average 49% with Residential rates only increasing by 12%.
We want to see fair and equitable application of rates on Kangaroo Island and need your support to enable action.
On behalf of our members, AgKI are requesting Council reinstate differential rates for the Primary Production land use category as per other comparable regional Councils. This will demonstrate Council’s acknowledgement that owners of primary production land have:
1. A lower level of service from Council facilities (ie unsealed roads, no street lighting, no footpaths etc)
2. Make significant contribution to the economy of Kangaroo Island by being the largest employer and
3. ‘the ability to pay’ principle for farmers who are under significant financial pressure.
To show your support for farmers on KI, please sign the petition by clicking the link below
Primary Production land use category rates on KI
Under the Local Government Act (1999), a council may opt for differential general rates based on the use of the land, the locality of the land, or a combination of the locality and the use of the land (section 156). An alternative basis of differentiation may be used in certain circumstances to allow rating relativities to be gradually altered or realigned (s156 (1)(d) & (2)). Councils’ use differential rating as it is the fairest method of allocating rates.
In practice, the differential rating system gives certain land uses like primary production a reduced proportion charge of rates (eg. if the primary production differential rating is 75%, the property will be charged at 75% of the residential rate of 100%). Another example where the differential rating is often applied is for vacant blocks at 200%. This is generally put in place to encourage vacant land owners to build a house.
The 2017/18 Annual Report stated ‘Council has determined that the temporary reduction in differential rating for primary production was introduced as a response to the drought in the late 2000s, which will be phased out at 2.5% per year until parity when the residential differential is reached (100%), so in 2017-18 the differential will move from 87.5% to 90%.’
The purpose of differential rating is to allow a system of fairness in paying rates, based on the value of the land and location. Councils in comparable regional areas reduce their differential rating for primary production if there are large value increases in the land over a short period of time. This allows for a more equitable rating payment system.
When compared to other regional Council’s in South Australia, we believe that the rates applied to primary production land on Kangaroo Island are not equitable.
With Valuer General valuations on primary production land substantially increasing and the removal of primary production differential rating, our members have seen increases on average of nearly 50% in their rates over the last 4 years.
The table below captures data (from Council’s Annual Reports) in regard to the increases in the primary production land use category since FY21 compared to residential.
Average rates in both the Residential and Primary Production land use categories have risen over the last 4 years, however Residential rates have only risen 12.16% over 4 years with Primary Production rising 49.79% over the same period.
With such significant valuation increases from the Valuer General coupled with the phasing out of differential rates for Primary Production land use category, Council stated in the 2024 Annual Report that 77% of Council revenue came from rates compared to 53% in 2023. The table below shows that that increase in revenue to Council is coming from Primary Production which has provided Council with a 41.43% increase in revenue to Council over the last 4 years compared to only 8.53% for residential.
