Buninyong research

Buninyong is a rural shire, adjoining the City of Ballarat, Borough of Sebastopol and Shires of Bungaree and Grenville. It was famous in the past as a rich gold mining centre but its fortunes declined when the mines were worked out. Most of it is now used for agriculture or grazing. In 1972, after a poll of ratepayers was carried, the rating basis was changed from net annual value to site value. That is, from 1972, rates were collected solely from land value, the buildings being no longer subject to council taxes.

The result of that change was an immediate, continuing and most substantial upsurge in new dwelling construction and other new building activity.

No. of houses Building permits by value

The table shows the building permits issued year by year over the last ten financial years. They cover three years under the old system, which taxed ratepayers on their homes and other buildings, and the seven years following Site Rating. The figures are taken from the Australian Bureau of Statistics series catalogue number 8703.2, issued annually.

Even a casual glance at these figures shows an amazing change in the direction and scale of development, from the very year in which the change to site value rating occurred.

For the three previous years under taxing of buildings the level of building permits was stable but falling. In the transition year 1972, even though the figures cover only nine months of Site Rating, because the local government year ends in September and the first three months of it are under the old conditions of taxing buildings, 1972 still showed a 47% increase in dwelling permits over the previous one.

The most significant of any comparisons are those for dwellings. Other Buildings and All New Building figures include business and government buildings which are more capricious in their frequency and cost. The numbers of dwellings and their values have skyrocketed since removal of council taxes from buildings. Ratepayers have responded immediately to the incentive of Site Rating.

The numbers of dwelling permits for Buninyong in 1978 were 184 compared with 30 in the last year of taxed dwellings. That is a rise in the annual growth rate of 513% in seven years. The values of the dwellings increased from $322,000 in the last year of taxed buildings to $5,080,000 in 1978. That is an increase of 1477% in the annual growth rate in seven years.

The effect of these colossal increases on the scale and values of building activity in Buninyong, in providing increased employment and improving business in a period of general stagnation and unemployment elsewhere is most important. It worked to improve conditions over the whole Ballarat Statistical Division.

What happened in Buninyong, is that after 1972, home seekers have been able to get sites there more cheaply than elsewhere in the Division, but still with the same locational advantages. And just as important, their lower rate commitments under site rating enabled them to meet home purchase finance requirements which could not have been met under net annual value rating.

In effect, Site Rating helps to keep land prices lower than they otherwise might be in a speculators market. This is important particularly for first home buyers. It is not in the interests however, of land speculators .