WIMMERA residents say the local government rating system is "broken" in rural municipalities.
The state government's independent rates review panel visited Horsham on Tuesday to speak with residents about their concerns regarding the system.
Findings of the session will help form the Local Government Rating System Review.
The panel will run 17 community consultation sessions across the state. Horsham was the 14th session.
Panel chairwoman Kathy Alexander said there were a number of issues consistent across the state.
"The big issue is the inequity that people are feeling across the metropolitan and rural divide. Then there's the divide felt by residents within council areas about the inequity between the farming sector and the residential sector in terms of the amount of rates that are paid," she said.
"Rural councils have such a small rate base and say they can't raise levels of rates without seriously hurting the community. Just because their towns are declining doesn't mean they don't deserve services."
She said property valuations was another consistent issue brought up across the state.
"Residents are saying they can't understand how their properties can be valued so high," she said.
The state government set the 2019-20 cap at 2.5 per cent for all councils, which was a 0.25 per cent increase on the previous year's cap.
Rates have been a contentious issue in the Wimmera after a breakdown of Horsham Rural City Council's 2018-19 Budget meant residential rates decreased by 0.6 per cent, while farm rates increased by 11.8 per cent.
Horsham council's 2019-20 Budget included a general rate increase of 2.25 per cent.
The council changed its farm rate differential from 80 per cent to 67 per cent of the general rate in 2019-20 to help ease the rate burden carried by the farming sector.
A breakdown of rate impacts for individuals showed that the change for residential ratepayers was 9.19 per cent, while rural rates decreased by -5.83 per cent.
Commercial rates rose by 2.32 per cent, while industrial rose by 2.69 per cent.
Yarriambiack Shire Council's general rate increased by 2.23 per cent in 2019-20 due to the council's slight over application in the 2018-19 financial year.
West Wimmera Shire Council successfully applied for a rate cap exemption in 2019-20 with rates rising by 3.5 per cent.
Ararat Rural City Council's industrial rates rose by 5.64 per cent in 2019-20, commercial rates rose by 2.79 per cent, and farm rates rose by 2.46 per cent.
Northern Grampians Shire Council's residential rates rose by 2.97 per cent in 2019-20, commercial rates dropped by 1.49 per cent, industrial rates dropped by 3.39 per cent, and farm rates rose by 2.95 per cent.
Panel examines rating issues
THE rates panel is made up of chairwoman Kathy Alexander, John Tanner and Ron Ben-David.
Dr Alexander said the panel's job was to review and analyse the current local government rates system to find ways to make it more fair and equitable.
She said the community consultation sessions were essential to form the review.
"We are definitely listening to the issues. The government and (Local Government Minister Adem Somyurek) have undertaken this review to understand the issues raised, and where possible, do something about it," she said.
"It's our role and function to have a look at all those issues and see if something can solve the problem. However, when you solve a problem you have to make sure that your not creating new ones."
She said the panel was pleased with the discussion points Wimmera residents had raised.
"There were a number of very good ideas raised by the community at the Horsham session. But while they sound like good ideas, we don't have any data on how they would impact the bottom line," she said.
"Even though community consultation is the fundamental platform of the review, we need to get some facts and evidence about the issues raised across the state.
"Once we've done that, we will do some analysis around a set of principles that we identify, including what we conclude about inequity and financial sustainability. We'll use those principles as a lens to analyse all of the data."
The review is also receiving public opinions through an online survey and written submissions. Both close on November 1.
After submissions close, the panel will start identifying areas where more data is needed.
"Once we have all that information, we will create a summary of the common themes that have emerged through the consultation process," she said.
"It will also be a reflection of what we've heard. There will be no analysis from our point of view because we won't have the data or evidence."
The panel must report its findings to Mr Somyurek by March 2020. The Fair Go rate cap will not be covered in the review and will be separately reviewed by 2021.
Wimmera residents have their say
WIMMERA residents were common in their criticism of Victoria's rating system, saying it wasn't fair and equitable to rural ratepayers.
Horsham Rural City residential property owner Bill Ower, a former real estate agent, said the rating system was broken and needed to be fixed as soon as possible.
"As a Victorian Farmers Federation member, this is an issue that is of great importance. Farmers are being affected and aren't getting a fair deal," he said.
"In rural councils the population is very low and much lower than a suburban municipality in Melbourne.
"Therefore, the average person is asked to pay considerably more money to find their local government. Councils can't exist their funding unless they tax existing property owners.
"In a municipality like Horsham where we have farmers paying most of the rates, they just get overwhelmed with the cost of it.
"Without some intervention from state or federal governments, local government has very little chance of surviving much more than the next decade."
Craig Henderson farms at Wilkur between Warracknabeal and Birchip. His land falls into both the Yarriambiack and Buloke shires. He said the rural rating system was broken.
"My rates have doubled in the last 12 years. The problem is that we don't get any services to justify the rate increases," he said.
"With the consolidation of farms over the next 20 years on average doubling, we're going to see this rate burden go down to hardly anything.
"I know farmers who are paying one per cent of their council's rates and their not getting their services."
Longerenong farmer Robyn Gulline suggested only levying rates on buildings and not on farm land.
"Why should our tools of trade be taxed? All buildings should get taxed but at a flat dollar rate across the state and then it gets divided up across all councils," she said.
She suggested placing more costs for community organisations back on the state government.
"So many of the community organisations started with government funding. How about we put that back on the government," she said.
"What we have is a disincentive in regional areas. The rates issue is dragging people to the city; you can live in the city in a million-dollar mansion and pay less rates than someone living in a house here worth far less.
"We need to make living in regional Victoria an incentive rather than a disincentive."
Kalkee farmer Fletcher Mills said he had experienced an extreme rate increase in the past decade.
"Ten years ago we paid $12,600 in rates. Last year we paid $31,700 - which is a $19,000 increase. I don't want to pay an extra $20,000 in another 10 years' time," he said.
"I'm not making any money off that land because it's a dead asset."
Glenorchy resident Michael Davies owns a residential property in the Northern Grampians Shire Council. He said he wanted to know why his rates had increased "enormously".
"This year I had a valuation and they rose by 138 per cent from last year. I made some small alterations to the property, but nothing to justify that large increase in value," he said.
"We're in a flood zone so my property isn't very resalable. We also don't get enough services in town. I think rates should be going up in line with the consumer price index."
Horsham councillor John Robinson suggested substituting rates for a percentage of the GST.
"Myself and fellow councillor David Grimble spent a lot of time last year on the rates issue. One of the issues that we found is that property values don't reflect the capacity to earn," he said.
"It's a wealth tax and while the council has taken the farm differential from 80 per cent to 67 per cent, it should go lower but to what extent we're not sure.
"The system is flawed. I can't see why GST can't be involved in the rates issue by taking the wealth tax away and going to a user pays model.
"What we have isn't sustainable; the other two tiers of government get funding from the GST."
Cr Robinson said the council raised about $20 million in rates but spent $18.5 million on council staff salaries.
Read the review's discussion paper below
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