Councils consider chopping vital services as plantations pay rates direct to State, cutting out local shires

Reductions in road improvements and cuts to community grants are being considered by rural councils hit by a change in the way rates are collected from forestry plantations.

The Forest Products Commission no longer pays rates to the shires in which it operates. The money goes directly to the State Treasury instead, leaving councils like Cranbrook and West Arthur with significant cuts to their income.

Shire of Cranbrook president Perin Mulcahy said her council would be left short by $28,000, while Cr Karen Harrington, president at West Arthur said the change meant a shortfall of more than $30,000 for her local government.

Both councils have joined the Warren Blackwood Alliance of Councils to raise awareness of the change of rules and put pressure on Minster for Forestry Jackie Jarvis to reimburse the money they have lost.

The collective loss in 2025-26 for the seven shires in the alliance is $325,000.

Cr Mulcahy said her council had already set its budget for 2025-26 and was now having to plan for next year without knowing if the FPC income would be replaced.

“The loss of revenue is already forcing us and other councils to consider the difficult decision of what core services or programs we must reduce or cut in the 2026-27 financial year,” she said.

“Whether that be road maintenance, community grant programs, youth initiatives and the capacity to co-fund grants.”

The FPC’s core business is harvesting and managing pine plantations on public land, and is regulated by the Department of Biodiversity, Conservation and Attractions.

However, it also operates on private land and is now able to acquire land of its own.

The WBAC is concerned the FPC’s ongoing land acquisition and plantation expansion program will mean properties transitioning out of the local rates base.

Cr Mulcahy reckoned the $325,000 shortfall could turn into millions in coming years.

“It is the long-term trajectory we are most concerned about,” she said.

“As more farms are purchased the effect of the non-payment of rates to local governments will increase.

“It is important to remember our councils maintain the roads, fire mitigation and community infrastructure the FPC tree plantations rely on.

“FPC also has a huge impact on our roads when harvesting.”

Cr Harrington echoed Cr Mulcahy’s concerns.

“While we continue to support industries such as forestry, which complement local agriculture, the shire remains responsible for maintaining vital community services, including road infrastructure and fire mitigation measures — services heavily utilised by these same industries.”

The alliance said in a statement that the situation was unfair on private plantation owners.

“It also creates inequity, as private plantation operators continue to pay rates directly to local governments, while the FPC does not,” it said.

The alliance had a meeting with Ms Jarvis and want her to “find a fair and practical solution”.

Cr Mulcahy said she did not want the burden placed on local ratepayers and called for a long-term plan.

“We need to manage this and don’t want to shift this financial pressure onto our local communities,” she said.

“We seek clearer definitions around rate exemptions and the establishment of a long-term funding arrangement with the State Government which restores fairness and protects essential community services.”