The State Government has announced it's setting up a panel, to review the council rating system.
Local Government Minister Adam Somyurek has outlined timeframes and terms of reference for the rates review.
It will be undertaken by an independent panel, let by former Royal Children's Hospital and City of Melbourne chief executive Dr Kathy Alexander.
"This is about ensuring we have a rating system that is fair, equitable and effective for all Victorians," Mr Somyurek said.
"The system we have now is complex and in need of review - we need a contemporary rating system that gives people a fair deal.
"I look forward to working with Dr Alexander on this important review and building on our Fair Go Rates System."
The State Government promised the review, in the lead up to last year's Victorian election.
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Mr Somyurek said the panel will look at:
- current local government rates and charges
- current rating exemptions and concessions and their application to various classes of land, including farm land
- the autonomy of local governments to apply a rating system that takes into account local factors
- current exemptions and discounts for local government rates the impacts any recommended changes would have on councils, ratepayers and residents.
Cap to stay
The Fair Go Rates cap, which has stopped a decade of average annual six per cent increases, will remain in place.
Victorians will be able to put their views to the panel and participate in the review process
It is expected to deliver its recommendations to the State Government in March 2020.
Former Northern Grampians shire mayor Councillor Tony Driscoll said the review was great news.
The shire was praised by the Victorian Farmers Federation for adjusting the differential levied on its farming properties, before passing last year's budget.
Read more: Farmers agitate for a new rating system
But he said it was unlikely to fix the underlying problem facing rural councils, their ongoing sustainability.
"That will be the challenge for the rating review, the reality is that it's not going to change the size of the revenue pie," Cr Driscoll said.
But VFF president David Jochinke said his organisation was frustrated by the delayed timeline and the lack of a rates freeze.
"Rural and regional rate payers have been waiting since November 6 for action on a rates review following a pre-election promise made by Premier Andrews," Mr Jochinke said.
"It has taken five months for this promise to be actioned and now we discover that rural and regional rate payers will need to wait another year for the report to be delivered.
It has taken five months for this promise to be actioned and now we discover that rural and regional rate payers will need to wait another year for the report to be delivered.
"Premier Daniel Andrews and MrSomyurek claim they are seeking improvements for a 'fair and equitable' outcome but farmers across the State are really starting to question this rhetoric.
"Farmers have experienced rate increases of over 50 per cent."
While farmers wanted to contribute to their local communities, they should not be underpinning the council's operations, particularly when many of them do not receive council services provided to townsfolk.
"Farmers across the State are trying to make ends meet after a number of very challenging seasons," he said.
"Many farmers simply cannot afford to pay their exorbitant rates bills so in the interests of fairness and equity Mr Somyurek must put a freeze on rate increases until the review is finalised.
"We have to question if this review is a genuine attempt to fix the problems."
He said the VFF noted the review excluded any evaluation of the rates cap, land valuations, taxation and other local government funding sources.
"We're unsure how this review will contribute to the development of a sustainable local government funding model without considering these fundamental elements.
"We are also severely disappointed that the VFF, a key stakeholder acting on behalf of thousands of farmers contributing significantly to Victoria's economy, was not consulted during the development of the terms of reference for this review."
The Opposition's Agriculture spokesman Peter Walsh said it was a sham review, which wouldn't address the number one issue faced by farmers, the unfair rates cap.
He slammed the terms of reference, which he said were finally released by the government after lengthy delay.
"Labor's so-called Fair Go rates cap caused farm rates in some shires to skyrocket by nearly 30 per cent last year," Mr Walsh said.
"Farmers waited months for the Government to get cracking with this review, and now we learn Daniel Andrews is excluding his failed rates cap from the scope of the inquiry.
"It's also frustrating the review's scope excludes looking at the adequacy of the valuation system and that it will ignore other sources of local government funding like State and Commonwealth grants.
Mr Walsh said the government had also ignored calls for an interim rates cap to be applied to all rating categories, while the review is conducted.
"Farmers who got hit with huge increases last year are rightly very nervous about the next rates assessments which will be hitting mail boxes soon.
"While Daniel Andrews dithers, our farmers are being rated out of existence at a time when many are already under pressure from drought, high water prices and skyrocketing energy bills - there's nothing fair about that."