Cr John Cunningham moved that Council initiate a petition to be served to both the State and Federal Governments objecting to the continuation of municipal rates, that the petition be made available for ratepayers to sign at all council service points and that Council write to all councils in Victoria, the Municipal Association of Victoria, the Minister for Local Government, Shadow Minister, the Federal Treasurer and the Prime Minister calling for the abolition of rates and stating that Council supports a rise in the GST to specifically fund local government.

Cr Cunningham said the suggestion of formalising a petition came from rural ratepayer Tom Atkinson who provided council with a submission following the release of the 2012/2013 budget.

"Municipal rates is a regressive tax, the more you improve your property the more you pay," Cr Cunningham said.

"Great Britain, where rates were first implemented, scrapped the entire system over 40 years ago.

"State and Federal governments have an opportunity to increase the GST by three to five percent to fund local government services. These services are provided to the whole community through an increase in GST and then those who are most able and who spend the most will be making a higher contribution."

Cr Cunningham said the GST is a growth tax and rises usually by more than CPI.

"In my view it would end the problem we have, the debate we have, everyone would be getting the same services for the same cost irrespective of where they live, whether they live in the country or the city area," he said.

"This petition makes sense to me, this petition isn't something that's brand new it's something that's been discussed by the MAV.

"I think Ararat Rural City, if we're going to have these conversations about rates on an annual basis we need to be in the forefront of pushing this and suggesting to our fellow councils across Victoria and relevant Ministers, both state and federal, that significant changes be made to the funding of local government."

Cr Cunningham said there was no doubt rates were going to go up, particularly when it came to funding employee superannuation and trying to bridge the infrastructure renewal gap.

"When the Commonwealth government run unfunded (superannuation) schemes - they don't fund theirs but they force us to fund it - and when we look at the infrastructure renewal gap and the difficulties we have maintaining our roads and other infrastructure, local government does need to be funded, especially in rural areas, in a different way," he said.