Conservation hindered: The impact of local government rates and state land taxes on the conservation of native vegetation
National R&D Program on Rehabilitation, Management and Conservation of Remnant Vegetation, research report 3/99
Carl Binning and Mike Young, CSIRO Wildlife and Ecology
Environment Australia, 1999
ISBN 0 6425 4006 3
- Conservation hindered: The impact of local government rates and state land taxes on the conservation of native vegetation (PDF - 721 KB)
About the report
Conservation and sustainable use of natural resources can only be achieved through local area planning and management. This report evaluates existing exemptions from government rates and State Land Taxes and the impact of different methods of land valuation. State and local taxes are shown to have widely varying impacts on conservation activities.
Rates and taxes on land have both a financial and symbolic impact on a landholder's willingness to conserve native vegetation. This is evaluated with the objective of understanding how private investment in the conservation of native vegetation can be more effectively promoted in Australia.
The broader issue of how governments can promote philanthropic investment in nature conservation is also considered in this report and in the more recent briefing paper by CSIRO titled Philanthropy - sustaining the land. Tax structures have a significant role to play in this wider agenda. New tax-based approaches are needed to achieve conservation outcomes. Financial incentives that share the cost of conservation across the community are required.
Rates are the primary means through which local councils raise revenue from their local communities. Rates are usually determined in relation to four categories: farm land, residential, mining and business. Individual councils have the power to create sub-classifications of these categories. This report suggests that there is capacity for a 'conservation category' to be built into the differential rating systems of Councils.
Rate rebate incentive programs for conservation could be effectively implemented by local councils. However, it is recognised that the financial capacity of some councils to introduce schemes of this kind is strictly limited. At a state level, land tax exemptions could create further incentives for the preservation of high value areas of native vegetation on private land.
A summary of the impact of annual land rates and land tax on the incentive to conserve native vegetation leads on to a set of policy options to address the issues identified.
Each level of government can implement these options independently of the other.
To date, programs promoting conservation agreements have been slow to get established, however, incentives offered to date have been modest or in some cases, non-existent. If additional program support and tax incentives for entering into conservation agreements are introduced, there will be a significant increase in the number of agreements successfully negotiated. The question of who should fund the gap caused by the rebates is also addressed. The most workable option would be for local councils to use differential rating to provide incentives at no net cost to revenue. This could be done by raising rates across the whole community by a small margin approximately equal to the percentage of rateable land covered by a conservation agreement within a given local government area.
The general recommendation of this report is that over a period of three years, councils, in cooperation with State and Commonwealth governments develop processes for incorporating the costs of rate rebates in the rating or general grant structure of participating councils.
The report concludes that conservation is hindered by rate and land tax structures. It identifies important conservation policy opportunities for all spheres of government, which utilise rate and land tax concessions.