Legislative Council, Wednesday 12 August 2026
Ms FORREST question to the The Hon Kerry Vincent MLC, Minister for Local Government
The Future of Local Government Review’s Final Report (October 2023) recommended the Government examine alternative revenue from major commercial operations (Recommendation 17) and undertake a Review of Rating (Recommendation 23), partly in response to council concerns – including Central Highlands Council’s own submission to the Review – about rate exemptions on assets such as wind farms, which the Council argued required a structural, equity-based fix rather than a project-by-project approach.
- Can the Minister for Local Government confirm the Government’s formal response to Recommendations 17 and 23, and what work, if any, has been undertaken on each since the Government’s response was released in May 2024;
a) Was a Payment in Lieu of Rates scheme (PiLoR), of the kind operating in Victoria, considered as the mechanism for implementing either recommendation;
b) If so, why was it not adopted; and
c) If not, why not?
2) Was Treasury asked to model the revenue implications of a PiLoR-style scheme for Tasmanian councils as part of this work?
3) Why did the Government direct or permit the Valuer-General to apply a bespoke land valuation methodology to windfarm sites, rather than progressing PiLoR?
4) a) Was this an administrative decision by the Office of the Valuer-General under the Valuation of Land Act 2001, or a policy direction from Government; and
b) if it was a policy decision which Minister, if not you, approved it?
5) a) Can the Minister confirm whether solar farms remain unrated under the standard ‘chattels’ exclusion, while windfarms alone have been brought into a valuation-based rating approach; and
b) if so, what is the policy rationale for treating the two technologies differently, and when will solar be addressed?
6) Under the current Valuer-General approach, rates liability falls on the host landholder rather than the plant operator:
a) Has the Government sought assurance, contractual or otherwise, that lease arrangements between operators and landholders ensure rates costs are passed through to the operator; and
b) At the Ark Energy St Patricks Plains site, where the project spans five separate landholdings, can the Minister confirm whether this results in five separate valuations and five separate billing processes, and what additional administrative cost this places on the relevant council compared with a single PiLoR assessment?
7) a) How does the yield to local government under the Valuer-General’s site-by-site valuation approach compare with what the same site would generate under the Victorian style PiLoR formula (currently a $67,270 base plus $1,515 per MW); and
b) Has this comparison been done, and will the Minister release it?
8) PiLoR is price-indexed annually and tracks consistent megawatt output for the life of the asset, whereas land valuations are periodic and may decline as a generation asset ages.
a) Does the Government accept that the current approach risks declining real rate revenue to host councils over time, in contrast to PiLoR; and
b) What plan, if any, does the Government have to review or replace the current valuation approach to address this risk?
9) Given that most wind farm operators in Tasmania already operate PiLoR-compliant assets in other states, what assessment has the Government made of investor and operator views on Tasmania’s divergent approach, and the case for national consistency?
10) a) Will the Government consider introducing legislation to adopt a PiLoR scheme for renewable energy generation in Tasmania; and
b) if not, why not?
ANSWER:
- The Government released its response to the Future of Local Government Review in November 2024. In its response, the Government indicated its support for 36 of the Review’s 37 recommendations. The Government has laid out a staged implementation program.
- With respect to recommendation 17, the Government partially supported the recommendation, noting it would ‘consult on potential frameworks to help benefit councils which assist major operations in their local government areas’, and indicated this would be included as part of its Local Government Priority Reform Program 2024-26.
- In relation to recommendation 23, the Government indicated its support for a rating review as a medium-level priority to be undertaken post-2026. It is noted FoLGR recommended such a review only be undertaken once its other revenue reform recommendations had been considered and implemented.
- Initial reform effort in response to FoLGR has focused on priority governance and accountability measures – including those recently considered and passed by the Legislative Council via the Local Government Amendment (Targeted Reform) Bill 2026. Work on longer-term recommendations will continue as part of the Government’s staged implementation approach.
- As such, no detailed technical investigations have occurred of the type indicated in the Honourable Member’s question, nor any specific engagement or consultation with industry or the sector. However, both things would need to be undertaken to support any serious consideration about the introduction of a Payment in Lieu of Rates scheme in the State.
- Questions about the role and work of the Office of the Valuer-General are most appropriately addressed to the Minister for Parks and Heritage as the relevant portfolio Minister.
- However, I am aware the Office of the Valuer-General recently introduced changes to the Valuation Property Classification Codes (VPCCs). This includes a number of electricity generation, storage and transmission-specific categories. I understand, therefore, the new VPCCs do not apply exclusively to windfarms, but also capture solar and battery installations.
- I am aware a number of local councils in the State are pursuing the VPCC option to allow for differential rates to be applied to wind farms and other electricity infrastructure (generation, transmission or storage).
- Each year councils set their rates budget for the next financial year and adopt a rates resolution to apportion across properties in the municipality. Importantly, councils have the discretion to utilise either the Land Value, Capital Value, Assessed Annual Value supplied by the Office of the Valuer-General or Average Area Rates.
- The discretion afforded to councils under the Local Government Act 1993 allows them to vary the general rate based on factors such as use, locality or other factors. This can include different applications across uses such as residential, commercial, primary production and industrial. Therefore, it is a matter for the relevant council to determine the amount of rates each property owner is liable for.
- I understand the OVG undertook this work as a process to support its own internal systems and on its own initiative, and I can confirm I had no role in directing it be completed.
- The introduction of VPCCs is not a substitute for a Payment in Lieu of Rates scheme, nor does it preclude the potential future pursuit and implementation of such a scheme by the Government.
- Contractual arrangements between landowners and leaseholders involved in renewable energy developments are matters for the parties to those contracts. Similarly, questions about how councils administratively collect rates from landowners in their municipalities are best directed to the relevant councils.