Nobody likes an unexpected bill. But when you’re elderly and have carefully budgeted your retirement down to the last dollar, an unexpected bill can really throw you and even force you to cut back on necessities like heating, food and medicines. This is the terrible situation facing hundreds of retirees right now, and in particular at least some of those living in units owned by not-for-profit organisations in and around Hobart.
Up until now Tasmanian councils have forgone general rates from land owned and occupied for charitable purposes. But some councils are so desperate for cash they’ve decided to raid the retirement kitties of the elderly. Hobart and Clarence councils in particular have changed their interpretation of the Local Government Act and removed the rates exemption, and Kingborough and Glenorchy are expected to follow.
The councils’ lawyers argue that while retirement units are owned for charitable purposes, they are not occupied for charitable purposes. It’s a tricky legal interpretation that potentially raises millions for the councils. But it also pulls the rug from under thousands of vulnerable Tasmanians who paid rates and taxes for most of their lives before deciding to move into these units. The Local Government Association of Tasmania is backing the cash grab and it’s expected more Tasmanian councils will fall into line.
Southern Cross Care, which operates a number of the affected retirement units, has engaged legal heavyweight Brett Walker SC and started legal proceedings. Walker’s advice is clear – the land is owned and occupied by the charity for charitable purposes and should be exempt from the general rate in accordance with the Local Government Act.
This change is not only arguably unlawful, it’s also unfair if only because it’s retrospective. One resident who has written to me says she planned her retirement some time ago and her calculations did not include rates because of the exemption. Many residents tell me that they simply don’t have the money to carry this additional financial impost on top of what they’re already paying in maintenance fees of up to $100 a week. If councils do persist with this reform it will cost some pensioners as much as $1,500 extra a year.
If the councils don’t back down then they better brace for a public backlash. Voters don’t reward governments that target the most vulnerable members of the community to prop up budgets. Remember the public outrage at Tony Abbott and Joe Hockey’s 2014 budget of a thousand cuts? Think of the resistance Malcom Turnbull and Scott Morrison have encountered cutting services and government payments while protecting the rich. Frankly, governments at all levels need to get their priorities right, and they aren’t right when they treat retirees as ATMs.
The handwritten letters coming into my office describe the stress this money grab is causing. One resident of a retirement village in Hobart worries how she will find $1,000 a year for the rates on top of her rent. She’ll be left with less than $200 a week for food and other bills. Another retiree is preoccupied with how to trim her budget and tells me that the only way to save money will be to cut her electricity consumption. To “use hot water bottles and close the curtains and blinds – and live like a hermit” the worried senior explained to me in a letter.
Another elderly member of our community does not have a spleen and needs expensive medicine. She writes that paying rates will see her quality of life “deteriorate immensely”. Others are saying they won’t be able to afford to stay in their home and are lying awake at night fretting over where they’ll go. Can they afford a private rental? In many cases no. Will they have to join the long list of people waiting for a public house? In some cases yes. I ask councils, is this really the best way to prop up your budget?
Older members of our community are already feeling the pinch with the inadequate Age Pension, changes to superannuation, record low interest rates on their bank deposits, a public health system in perpetual crisis and private health premiums outpacing inflation. These people can’t go out and work a few more hours or take on a second job like younger members of the community. There’s simply no fat left to trim. Councils need to stop listening to lawyers and bean counters. They need to commit to the rates exemption in the Local Government Act and leave our older citizens alone to live out their retirements in peace.
I’ve written to Hobart aldermen and Kingborough councillors urging them to abandon this foolhardy decision. I’ve also warned Glenorchy aldermen to back off. Whether or not they’ve got the sense to do so remains to be seen.