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Farm rates and time for change

While each tier of Government hands us a series of taxes, bills and payments, it is possible that Local Government rates rile us most.

We know we have to pay them and why.  But they engender a guttural stirring that agitates to our core.

Increasingly, it is not just how much we pay, but the question of who pays and how much, that is raising the ire.

It is a progressively putrid problem for rural and regional councils.

Our current rating system is based on early 19th-Century methodology emanating from the English county system.  It relied on landowners and farmers to largely pay the bills.

It has far passed it’s used-by date in Australia.  Our wealth does not emanate purely from the land – a blinding reality in a tech-savvy 21st Century. It is brutally inequitable.

Compared to big city councils, country councils have a much larger land mass to look after.  They also have fewer ratepayers.  This means bigger bills paid by fewer people.

The recent Ararat example shows how volatile council decisions can be.  Last year it wanted to remove the 55 per cent farm rate differential, forcing farm rates to almost double. It was untenable and good sense finally prevailed.  For now.

Many shires have locked into a general rate increase around 2.25 per cent – largely guided by the State Government’s rate capping policy to stop councils’ relatively easy grab for cash.

Annual valuations will impact further.

Such ambivalence to ratepayer’s pockets may be born of the lack of business acumen by too many councillors who simply have no idea how to run a business.  Council is a big business.

With increasingly disparate and declining populations, the rating problem for rural and regional councils is simply ramping up.

The Victorian Farmers Federation, of which I was once president, is right to argue the fair-go case for farmers – and in truth – regional ratepayers generally.

It argues for sustainable funding of councils, where farmers don’t bear the burden simply by nature of their land holdings.

As Deputy Chair of the Parliament of Victoria’s Environment, Natural Resources and Regional Development Committee, I have heard much on this issue of late.

The Committee’s Inquiry into the Sustainability and Operational Challenges of Victoria’s Rural and Regional Councils was tabled in March.

It recognised that smaller councils need increasing – and sustainable – financial support from State and Federal Governments, including various grants mechanisms.

Without it, rural councils have no choice but to question what they can afford to provide.

For example, take Meals on Wheels.  Imagine the costs and wieldy bureaucracy around providing this service for a council like West Wimmera – taking in Edenhope, Goroke and Kaniva?

The service and costing shifting to local councils has not been met with anything like the financial support required.

Imagine, even, the huge kilometres of road network regional councils need to maintain – a problem not faced by those such as Melbourne City Council.  The comparison is stark.

Yet in Melbourne, the council makes millions of dollars from parking meters.  Millions.  They don’t make that in the main streets of Edenhope, or Avoca, or Beaufort.  The same applies to developer contributions for sub-divisions and big projects.

The broad implementation of a Municipal charge could help smaller councils – providing a certain and constant income, akin to the access costs charged by Water Authorities.

In that way, everyone pays.

Change is not optional.

Without it, the arguments about who pays the rates in regional areas are only just beginning.

The time is now for a new funding model for local government.