Business

They're arguing over $40M; and someone has their maths wrong

THEY'RE two councils with some of the biggest brains on board - Gladstone Regional Council and the Queensland Resources Council - and they're arguing over $40 million, but someone has got their maths wrong.

Queensland Resources Council chief executive Michael Roche has accused Gladstone Regional Council of a 200% rates hike, saying the LNG plants will be paying $37 million more in rates than they did last year.

But the council has capped its increase at 50%; all three LNG plants paid about $12 million to the council in general rates last year. So, under this rating structure the bill they can expect next year is only about $18 million.

Mr Roche has also thrown his support behind the two court actions launched by QCLNG in August and APLNG a couple of months afterwards by suggesting the council had based its new rates on the companies' capacity to pay.

Although those cases haven't progressed; both companies are still to serve the council with the suit.

"In recent legal challenges of significant increases in rates for industry it was ruled councils must not apply a 'capacity to pay rule', as it was deemed unreasonable to take into account the wealth of the landholder," Mr Roche said.

"The two new rating categories seem to do exactly that or even go beyond by taking into account profitability."

The council is standing by its initial response; saying it used the same rating principles applied to other industries.

They admit they made assumptions to calculate the rates, but say they welcomed all three LNG companies to correct those assumptions.

They haven't done that.

"We have discussed our parameters with them after delivering the budget and we are still waiting for feedback from them," Council chief financial officer Mark Holmes said.

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THE MATHS

Using QCLNG's land valuation of 8,500,000 rateable units (which differs between plants but is an approximation);

If APLNG is operating one train charged at 0.77490 cents in the dollar for it will pay;

$6,586,650

The same charge will be applied to GLNG if they still only have one train.

QCLNG is already operating two trains charged at 1.54980, so they will pay;

$13,173,300

Total: $26,346,600

However the council capped the general rates at 50% rise year, hence the $18 million.



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