Council rates emerge as a key state election issue

Farmers agitate for a new rating system


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RATES PROTEST: In July, farmers protested outside the Mildura Rural City Council, over a sharp increase in rates.

RATES PROTEST: In July, farmers protested outside the Mildura Rural City Council, over a sharp increase in rates.

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Concerns over council rating system inequities are playing out, ahead of the Victorian election.

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Rural rates are emerging as the most significant issue for farmers, ahead of the upcoming Victorian election.

Ararat crop, beef and sheep producer Sam King said rates were the number one concern, not only in Victoria but also Australia. In Victoria, primary producers have found a recent revaluation has resulted in a sharp spike in rates.

“As far as I am concerned, it’s the only issue,” Mr King said.

“There are lots of other issues in regional and rural Australia that warrant government assistance and investigation.

“But, as far as rates go, that’s the one issue everyone has got.

“Some have issues with water, some have issues with telecommunications and for some it’s roads – but we’ve all got rates, it’s the big one governments keep turning a blind eye towards.

Some have issues with water, some have issues with telecommunications and for some it's roads – but we’ve all got rates, it’s the big one governments keep turning a blind eye towards. - Anthony King, Ararat

Rating strategy

He was part of a strategy advisory group, set up after a revolt over plans by the Ararat council to abolish differential rates for farmers, just over 12 months ago.

The government appointed a Commission of Inquiry into the council.

Read more: Inquiry into extreme Ararat differential rates plan

“We went through a time when we lost 100 per cent of our cereal crops to frost – it was also the same time when our council, in its wisdom, decided to take the rating differential for farmland from 55pc to 100pc.”

“They keep saying a differential rating system is a discount.

‘”It’s far from a discount

“It’s a tool, put out by the Municipal Association of Victoria and the State government to make rates fair and equitable.”

Victorian Farmers Federation president David Jochinke said there was a lot of interest from members in changing the rating system.

“Members are just backing our claims, it is one of the primary election issues,” Mr Jochinke said.

He added it was also one of the toughest ones.

“The whole system we have got has to be totally demolished, so we can build up a new one.”

He said the VFF had reiterated, to both sides of politics, farmers wanted a moratorium on future rates increases.

Both sides of politics also needed to commit to comprehensive changes to the way the rating system operated and to look at the sustainability of local government.

Mr Jochkinke said members were willing to be a part of the solution.

“We have some principals, we think are very sound and our members are very keen to be part of the process, as well.”

Read more:

Rate rebate

Balliang crop grower Chris Sharkey said he had properties rated by both Moorabool shire and the City of Greater Geelong.

He said the rates he paid to Geelong were a little cheaper than those levied by Moorabool.

Properties classified as working commercial farms were eligible for a 40% rebate off the farm rate.

The council states, on its website, it’s objective in having a Farm Differential Rate and Rebate is to encourage the retention of large lot primary production holdings where a commercial farm business is being conducted.  

“We have used a combination of differential tariff and rebate in order to maintain the status of farms as the lowest rated tariff group,” the statement said.

“The farm differential is to recognise the benefits of large holdings, open space and traditionally, generally less demand upon Council services per land area held. 

“This takes into account low economic return to large landholdings, avoiding distortions in the market or an ability to contribute above the standard charge.”

Mr Sharkey said Moorabool had a rating differential of 78 pc, which hadn’t changed for a few years.

He said while his rate burden was not particularly onerous this year, the drought would cut into his production.

“It’s at a stage where we are struggling,” Mr Sharkey said.

“We haven’t had any frosts, but we haven’t had any rain either. It looks green, but there’s no feed for the sheep.”

He said his canola crops had been hard hit, “and the wheat’s on its way out too.”

Mr Sharkey agreed rates were his number one election issue.

“In the first year, the new government needs to have some really good, clear ideas on how to fix it, and fix it quickly,” Mr Sharkey said.

“It’s at a stage where commercial businesses and residents are feeling it, the whole funding for local government has to be looked at, it’s gone past shifting between ratepayer groups.”

Bills vary

Streatham crop farmer Anthony Mulcahy recently found his rates bill, from Pyrenees Shire, went up more than 50 per cent.

He has properties in four shires, with rises ranging from 11pc in Ararat, 16pc in Moyne, 37pc in Corangamite and 52pc in the Pyrenees.

That resulted in a combined rise of 26pc.

“I’m used to rate rises, but 52pc was a bit of a shock,” Mr Mulcahy said.

He was one of many Victorian farmers, caught out by the revaluation of agricultural land, which flowed onto to rate increases.

Read more: Victoria's rural councils seek to ease rate pain for farmers

“We operate in the extremity of all four shires – we are a long way from any of the shire centres and we don’t get well served by any of them,” Mr Mulcahy said.

“As farmers, we would like to see some sort of return, we are certainly not getting that from our rates, we have poor roads and live a long way from towns.”

Dry conditions, this season, had followed crop losses to frost, last year.

Mr Mulcahy said he intended to challenge some of the rate notices.

“I want to see some evidence of local land sales that can back up their increase in valuations,” he said.

“We are seeing increasing inconsistency across shires – our properties in Moyne and Corangamite are separated by a creek, on one side we pay $22 a hectare, on the other $11.50,” he said.

“It’s a statewide problem and it needs a total overhaul.”

“It’s not fair, and it doesn’t work.”

Mr Mulcahy said the correlation between real estate prices and the productive value of land had been lost.

“There are a lot of unhappy farmers, and I expect things will ramp up a bit.”

Political response

The State government and Opposition have been contacted for comment.

At the VFF Ballarat conference, in July,  Premier Daniel Andrews said the State government was taking a considered approach to the rates pressures facing some farmers.

He said the government would detail a response “very soon”.

Mr Andrews said there had been one review, under  the Local Government Act, of one council’s rating strategy.

“There is, then a broader piece of work, that goes directly to this issue and addresses the smaller councils that are perhaps driving some of these sorts of decisions,” Mr Andrews said.

He rejected calls, made from the floor of the conference, to sack Horsham City Council and replace it with an administrator.

“I was invited to run a commentary on the event on whether we were going to use our very significant power, under the Local Government Act, but it would be best to go through a slightly different process, than answering questions in a public forum,” Mr Andrews said.

Deputy State Opposition leader, the Nationals  Peter Walsh told the conference he didn’t believe councils used all the tools they had at their disposal.

“The rate cap has failed farmers, because it limited overall rate increases, not how they were raised.

“There is a local government reform bill, before the Parliament at the moment, and that talks about reducing the amount of rates can councils can collect the municipal charge from 20 per cent to 10pc,” Mr Walsh said.

“That’s a backward step.

“I’m disappointed a lot of rural councils don’t use the municipal charge, that’s effectively a household charge, which is meant to cover the services they deliver that everyone uses.”

But he said there was also a need for a change to the grants formula.

“For city councils the amount they get out of grants probably doesn’t equal the amount they get out of their parking meters,” Mr Walsh said.

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