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Nov 16, 2010

Has Brumby done a deal to strip councils of powers to super-tax the pokies?

As the Prime Minister helped launch John Brumby’s re-election campaign in Bendigo today, a fascinating tussle over council taxing powers is playing out in the countdown to the Victorian election.

Julia Gillard, as part of her agreement with Andrew Wilkie and the Greens, has promised to hold a referendum to provide constitutional recognition for local government.

Yet as the Prime Minister helped launch John Brumby’s re-election campaign in Bendigo today, a fascinating tussle over council taxing powers is playing out in the countdown to the November 27 Victorian election.

With no mention in the federal constitution, Victorian councils are entirely a creation of the state Government. They can be sacked at a whim and most of their powers are derived through the Local Government Act.

At the moment, the law allows Victorian councils to impose differential rates on various classes of ratepayer, with the maximum being 4 times higher than the lowest rate levied.

Moreland City Council, in Melbourne’s inner north, levies the maximum 400% rate on empty overgrown blocks but blazed the trail on pokies operators by imposing a 200% differential rate.

When Moreland first attempted to go down this path last year, ALH, the pokies joint venture between Woolworths and billionaire Bruce Mathieson, launched a Supreme Court challenge.

Woolies had a win of sorts but then Moreland went back and reworked its gaming policy and imposed the 200% rate anyway, which will double the $115,000 paid in 2009-10 to raise $230,000 in 2010-11.

All 11 pokies venues in Moreland, including five controlled by Woolies, have now paid the first instalment of this super tax but an eerie silence has descended over the council. Why hasn’t Woolies gone back to the Supreme Court?

News Ltd’s local Moreland Leader yesterday splashed with the story under the headline “Deal or no deal” amid fears a secret deal has been done between Woolies, the Government and the Opposition to legislate away powers for councils to impose differential rates.

Moreland CEO Peter Brown told councillors last Tuesday he’d heard informally that Woolies had decided against launching another Supreme Court challenge and was instead dealing direct with Spring Street urging them to change the law.

The pokies industry has donated more than $1 million to the Victorian ALP during its time in office and as was noted in this Crikey story last February, Woolies has been getting all sorts of planning favours out of John Brumby.

With planning — especially the state government shafting councils by calling in major applications — emerging as the biggest hot-button issue in those key inner-city electorates, Brumby has an important decision to make.

Does he allow Moreland’s 400% super-rates model on pokies venues to sweep across all 79 councils and pour more than $10 million a year extra into local government coffers or does he cut councils off at the knees?

So far, the Government has been attempting to sweat this one out as gaming minister Tony Robinson attempts to hang onto his ultra-marginal seat of Mitcham.

Robinson has been virtually invisible for the campaign and is yet to commit to appear at the one and only pokies industry policy debate scheduled for next Tuesday as is explained in this promotional video featuring everyone from Tim Costello to No Pokies senator Nick Xenophon.

Meanwhile, the Victorian Local Government Association yesterday launched its pokies manifesto at Moreland City Council with the complete support from Moreland’s Labor mayor Stella Kariofyllidis.

Further north of Moreland, the City of Whittlesea is a 100% Labor-controlled council but one of its senior officers, Felicity Leahy, gave this cracking speech slamming Labor’s pokies policy at the VLGA launch in Moreland.

With Labor now revealed to have jumped into bed with the p-rn industry through S-x Party preference deals and the gun lobby through Country Alliance preference deals, it remains to be seen if a special deal has also been struck with the pokies industry.

Journalists have been promised an answer by this afternoon. Watch this space.

*Disclosure: Stephen Mayne is standing as an independent “no pokies” candidate in the Northern Metropolitan upper house region, which includes parts of Moreland. He will also be flying to Brisbane on Thursday for the Woolworths AGM where he is a candidate for the board running on a no-pokies platform that was heavily censored in the notice of meeting.

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4 thoughts on “Has Brumby done a deal to strip councils of powers to super-tax the pokies?

  1. Stephen Mayne

    Just a quick correction to the email version of this story where we said it was a quadruple special rate. In fact, Moreland is levying a double rate in 2010-11 which is bringing in an extra $115,000 a year.

  2. John Bennetts

    Why would the State bother? They’re on a hiding to nothing. If the differential local government rate is popular, they will lose votes on this issue. If the increased rates are unpopular, so few will give a cuss that no votes will be won either.

    IMHO, it would be safer and less electorally expensive just to let it ride and claim the credit if it is perceived as being popular or leave it in Council’s hands if it bombs.

  3. Gavin Moodie

    @ John Bennetts

    I agree that your position is rational, but I suggest that there are 2 countervailing factors.

    First, the State Government will want to extract maximum revenue from pokies operators for itself and thus it wont want to allow local government to raise a competing tax.

    Secondly, as Mayne implies Victorian Labor seems compromised by the big donations it accepts from pokie operators.

  4. John Bennetts


    You may be quite correct, in which case short termism with a defensive, narrow perspective will have won the day. Again.

    Where are all the broad-brush politicians? Where is the crash-or-crash-through leadership, and I don’t mean Latham – I mean ones with passion and commitment for real agendas.

    Why is everything so quickly reduced to consideration of whatever Woollies’ concerns may be? Since when did Woollies get a vote? If I had my way, all corporate and anonymous donations would be illegal. If you are not an eligible elector, enrolled in the particular candidate’s electorate, why should your money be permitted to be used by any candidate in order to sway the votes of those who are?

    That includes unions, political party trust funds, support organisations and so on. Each dollar spent should be traceable back to a specific donor. Moneys received by parties not in accordance with the above – eg anonymously, should be refused. Even the dumb old USofA, not often a shining light in matters ethical, does not permit non-citizens to contribute to party funds. Oz doesn’t even get that far.