A local government in Western Australia is facing potential bankruptcy due to a proposed amendment to the Local Government Act. The amendment, which recently passed in the lower house, would prevent shires from imposing rates on certain mining lands. Tralee Cable, the chief executive of Mount Magnet, expressed concern that if the amendment is enacted, the shire's annual revenue from rates would plummet from $3 million to approximately $300,000. "Effectively, this bill will bankrupt this local government," Cable stated.

The controversy stems from a Supreme Court ruling in July that allowed the Shire of Mount Magnet to levy rates on a mining camp operating under "miscellaneous licenses." These licenses typically apply to land with mining infrastructure, including access roads and accommodation facilities. Following the ruling, local governments were encouraged to examine the rates applied to miscellaneous license holders, a move that the mining industry claims could result in a $55 million annual cost.

Atlantic Vanadium, the owner of the mining camp, announced plans to appeal the Supreme Court's decision. In response, the Western Australian Labor government quickly proposed reforms to the Local Government Act, which were supported by the Chamber of Minerals and Energy WA. However, Cable criticized the rapid pace of the legislative changes, stating, "The speed of this bill, the complete lack of consultation, the disregard, the amazing disregard for the impact on our small regional community."

The proposed amendment would also require local governments to refund any rates collected on miscellaneous licensed land since 2017 within 28 days. Cable warned that repaying these funds would significantly deplete the shire's reserves. With a population of just 580 residents, she emphasized that losing this revenue source would threaten the economic viability of the shire. "We're not a dysfunctional, malfunctioning local government. This is not a small local government trying to gouge the mining industry. But we need regular, budgetable, reliable, non-discretionary revenue," she said.

Opposition Shadow Local Government Minister Kirrilee Warr described the situation as a "David and Goliath" struggle for small regional councils. She criticized the lack of consultation, noting that local governments had less than a week to respond to the proposed changes before the bill was publicly announced. "[That] is certainly not adequate time when we are working within the bureaucracy of any level of government," Warr remarked.

The WA Nationals have called for amendments to the bill to include compensation for affected councils through a revised Royalties for Regions scheme, but these suggestions were not incorporated. Warr also expressed concern that the amendment undermines the Supreme Court's ruling, stating, "We must respect the separation of powers. When did it become our place to start saying, 'Sorry, courts, we don't believe what you've just read and interpreted and said, and we want you to go and change that?' I am gobsmacked by that."

Local Government Minister Hannah Beazley did not directly address whether the amendment contradicts the court's decision. However, she defended the proposed changes as "sensible and effective law reform" that would restore the long-standing understanding that miscellaneous licensed land is not subject to rates. Beazley asserted that local governments would not suffer financially from the amendment, claiming that the land was never intended to be a revenue source for them.

The amendment has been read twice in the upper house but has not yet been formally adopted. There are only eight sitting days left in the upper house for this year, adding urgency to the legislative process.