East Gippsland looks at its operations, to help reduce its rate burden

Read more: Rate pain spreads south

Before this year's East Gippsland Shire budget meeting, residents presented a petition calling for a rate freeze and a 50 per cent reduction in farm rates.

Mayor Natalie O'Connell said the council rejected a rate freeze, but agreed to a 2.5pc increase, across all land classes, residential, commercial and farming.

Cr O'Connell said the council had also asked chief executive Anthony Basford to review the organisation's operations, to try and achieve a net saving of $1.5million.

"That is in response to feedback that rates keep going up," Cr O'Connell said.

Mr Basford was instructed to respond to council by the end of September.

Cr O'Connell said council could not have agreed to a rate freeze, without going back through a public consultation process.

It would have also missed its legislative obligations to have a budget in place, by the end of the financial year.

"A rate freeze would have resulted in around a $1.5m income reduction," Cr O'Connell said.

If expenditure were not reduced, the compounding impact, over 10 years, would be a revenue loss of more than $12m.

Cr O'Connell said the shire revised the rate differential down, so farmers were now paying 82.5pc of the general rate.

Council officers said it would also reduce the commercial/industrial differential rate from 145pc to 143pc per cent.

"The average farm rate would be reduced from 9.88pc to 2.45pc," officers said.

Cr O'Connell said East Gippsland had also set aside $500,000 in the budget to help stimulate the economy.

"It could be around grant funding for businesses, community events or a range of projects," she said.

'We will look to go to our drought reference group for suggestions and ideas as to how best it can be used, to support the whole community."

The shire would continue to lobby the State government for rate relief.

"We cover 10pc of the state, look after 40 communities and deliver 100 services, with 80pc of unrateable land, in the mix."

She said the council had spoken with the Valuer-General.

"We've gone back to the Valuer-General with our concerns, but we don't have any right of reply," Cr O'Connell said.

"We wanted to flag these valuations were not reflective of what was happening."

"They are just looking at what's happening in the market, and not what's happening on the ground.

"Farmers haven't derived an income from their properties, in the last two or three years."

Read more: Farmers agitate for a new rating system

Sandra Livingstone, Buchan South, said last year, the rates on one of her properties went up by 122pc.

That was reduced, on appeal.

"They came back to a 100pc rise, which was fairly pathetic," Ms Livingstone said.

"We are still paying 100pc on what we paid the previous year.

"That's a massive amount, in a drought, for anyone.

"This is the sort of thing that's happening to people, and they wonder why we are cranky."

She said farming communities in East Gippsland had been under massive financial pressure, due to three years of drought.

"Yet our shire won't concede rate reductions, even temporarily, to aid the situation," Ms Livingstone said.

Farmers were carrying an unfair rate burden, for little or no services.

She agreed the petition was "a bit rushed," but council could have accommodated the change.

"At this point, everyone is feeling a bit shell shocked, we felt it was within their grounds to make this concession for us," Ms Livingstone said.

The council received significant income from the Bairnsdale Livestock Exchange, due to the high volume of stock going through the yards.

"They should have been able to reroute some of that money, back into helping farming communities," she said.

Farmers didn't yet know the impact of lowering the differential.

"Its all very well to change the differential, but it's the land values that are going up," Ms Livingstone said.

Geoff Johnston, Walpa, said lowering rates would free up cash, for his operation.

"It's another load of hay - I'm up to 14 loads - and I've been fortunate in keeping up, by selling cattle," Mr Johnston said.

"I'm trying to get a bit of weight and size into last year's calves."

Mr Johnston runs a self-replacing Hereford cow herd, selling weaner or grown steers, depending on climatic and market conditions.

He said he estimated his rates would be between $4000-$6000.

"The thing is, we haven't had a hell of a lot of help here," Mr Johnston said.

"The place is only painted green; we aren't out of drought.

"I'm sorting out more cattle to sell because we're not getting the rain - we are missing out, where we are."

He said he complained when his property was revalued, which did see a slight reduction in his rates.

"I think they knocked $150 off, that's only lolly money," he said.

Chris Nixon, Orbost, said he was expecting a rate rise of nearly $1000 after the revaluations pushed up prices in the shire.

"We are in the process of formalising a group to represent farmer's voices," Mr Nixon said.

"We are trying to get all farmers of East Gippsland to start communicating, with one voice, to try and get some better policy outcomes."

While the lowering of the differential on farmland was welcome, it didn't address the issue of a long history of overcharging the community for services council was delivering.

He said there was a very "liquid market" in East Gippsland, so it was hard to see why the revaluations reflected the true cost of land.

"We are going into the third year of drought, cash flows are low, and that's why we struggle with these valuations," he said.

"It's hard to understand how such increases can occur when we are being smashed by drought.

"Is it because of one man, who has paid too much for a couple of paddocks?"

David Mitchell, Bairnsdale, said rates had continued to increase, for years.

"It's been exacerbated by the drought we have copped in East Gippsland," Mr Mitchell said.

"There's a huge lack of water in the dams - it's as dry as I have ever seen it," Mr Mitchell said.

He runs Dohnes and composites on his block, which he says has irrigation.

"You have this rates structure that sees rates keep moving up, all the time," he said.

"You have to generate enough money to cover it, but they can't keep moving rates up - it's literally a land tax."

He said farmers had tried to speak with the council to explain the pressure rate increases were putting on the whole community.

"They could have frozen them," he said.

"The main pressure will come at re-election time; we will be looking to get some people onto council who are really qualified in the farming sector."

A spokeswoman for Local Government Minister Adem Somyurek said the full review into Victoria's local government rating system would be informed by an extensive

The review would conclude in March 2020, when the Panel provided its recommendations to the Minister.