The potential scrapping of farm differential rating in the Ararat shire could be a test case for Victoria and will be watched closely by the Member for Western Victoria, Simon Ramsay.
Mr Ramsay said the 55 per cent rate differential has been in place for many years for good reason.
“The possible scrapping of this rate structure could be disastrous for farmers in the region who need that land to make their living,” Mr Ramsay said.
The current proposal by the Ararat Rural City Council will abolish the 55 per cent differential and have all rate payers paying a uniform rate.
Under the change, farmers will pay 46 per cent more for rates next year – worth $2,432,665 – while all other ratepayers will pay less.
“Farms represent just 24 per cent of rateable properties in the shire, but already pay 38 per cent of the rates. Under this proposal, they will pay 55 per cent of the rate income,” Mr Ramsay said.
Local VFF representative, Charlie de Fegley told 3AW’s Neil Mitchell program (23/05/2017) that some farms already pay about $90,000 in rates and this could go up to $150,000-160,000.
“I don’t think I’ve ever heard of a business that has increased costs by 50 per cent in one hit and sustained their business,” Mr de Fegley said.
Mr Ramsay said the Ararat Council faces challenges because it is administratively top-heavy and home to a low socio-economic population with an average income of around $38,000.
“The Andrews Government’s introduction of rate capping is forcing Councils, like Ararat, to re-think how they do business. This is another example of the impact of Government policy and intrusion.”
Mr Ramsay is a member of the Environment, Natural Resources and Regional Development Committee which is currently undertaking an Inquiry into the Sustainability and Operational Challenges of Victoria’s Rural and Regional Councils.
“Through this budget proposal, the Council is effectively shining the state’s spotlight on itself.
“It will be questioned about why these changes are proposed and what the long-term ramifications are.
“I suspect from the Committee’s point of view, Ararat’s change raises questions about how to establish a longer-term sustainable funding model for small rural and regional councils,” he said.
“As it stands – this proposal appears unfair and inequitable to the farming community. Imagine the financial stress on farmers in times of drought, flood, fire or commodity upheaval?”