Victorian Local Government minister Adem Somyurek has steadfastly refused to include capping in the current rating system review.
He told a Parliamentary Public Accounts and Estimates Committee hearing the review would look at how rates were levied in other jurisdictions, to seek ways of making the system more fair and equitable.
"To include the rate cap in terms of reference would have been misleading because we will not be removing the rate cap; we are just not removing the rate cap," Mr Somyurek said.
"We will not be removing the rate cap because it has actually been a phenomenal success."
He said in the 10 years leading up to the introduction of the Fair Go Rates cap in 2016, rates increased, on average, by 6 per cent.
Mr Somyurek conceded individual ratepayers might experience increases higher and lower than the average rate, due to the relative movements in property valuations.
"What we are saying is - and I want to make this clear- the rating system review will look at how the rate burden is distributed fairly and equitably within the rate cap," he said.
Not working
Polwarth Liberal MP, Richard Riordan, whose electorate takes in Corangamite Shire, told a Parliamentary inquiry the rate cap was not working.
Corangamite is the latest local authority to see farm rise significantly, on the back of increased valuations in the north of the shire.
"The cap is across the whole shire - therefore some will go up exponentially, and some will go down a lot," Mr Riordan told the PAEC hearing.
"So in the whole northern part of my shire, where the land values have increased, they have got 30 and 40pc rate increases.
"Where the dairy area is a bit depressed, and prices have gone down or moderated, they have got negligible rate changes. "
Mr Riordan said rate capping had deliberately and specifically caused rate rises, so must be part of the review.
Mr Somyurek said capping had not made the problem worse.
He'd met with the Valuer-General to try and find out why rates for some rural properties were climbing.
"It is an interesting phenomenon, because what intrigued me was that farmers were doing it tough in parts and some were actually booming, but the value of farmland was going up," he said.
"He (the Valuer-General) had a couple of different theories, but the fact of the matter is what we have got is values of farmland going up exponentially.
"So if you did not have a cap, I contended that those farmers' rates would have gone up much more than what they are going up right now."
Mr Riordan said the cap was based on the average rate, so didn't work.
"But, Minister, a 2.5 per cent cap is not a 2.5 per cent cap if you can have a 35 per cent rate increase?" Mr Riordan said.
Mr Somyurek said the review was genuine and would look at everything except the rate cap.
"I am not about to defend the system, because I am not about to defend the status quo," Mr Somyurek said.
"If I was about to defend the status quo, I should not be doing the rates inquiry.
"We are doing a rates inquiry to actually look to try to find the most equitable and fair system."