Environment, Natural Resources and Regional Development Committee committee chair, Sunbury MP Tim Bull, stated that municipal governments play an important role in making regional Victoria a great place to live and work.

“It is crucial that councils have the financial capacity to fulfil their core responsibilities. This inquiry explored the current situation in Victoria’s rural and regional councils,” he satated.

“The Committee sought to understand the pressures these councils are facing, how they are responding and the impacts of council decisions on communities.

“The Committee heard many positive things about rural and regional councils (as well as a number of areas for improvement).

“The Committee also heard that some councils face serious challenges when it comes to financial sustainability. In particular, rural municipalities with small populations and large areas can have high costs but limited capacity to raise revenue to cover those costs.”

Western Victoria Liberal MP Simon Ramsay served as deputy chair of the parliamentary committee that produced the report.

Ararat Rural City chief executive Allan Bawden said he welcomed the report as it highlighted “the very real challenges facing rural councils”.

“Ararat is no different to the many rural councils which have experienced increasing costs as a result of responsibilities delegated to us by other levels of government and increasing compliance cost,” he said.

“At the same time our revenue base has been under pressure due to declining government grants and rate capping.

“I am sure that Councils will welcome the recommendation that proposes an increase in Financial Assistance Grants, a review of Council responsibilities and government initiatives which encourage the growth of population and employment in regional communities.”

Among the inquiry’s 14 recommendations was a call for the state government to consider mandatory differential rates but with a maximum of 25 per cent differences between the highest and lowest rates.

The report also urged the state government to reconsider how agricultural land was valued for rates to “reduce the very high rates paid by some farmers”.

Households could also have their rates bill compared with their income to identify which rates notices were sending residents past a financial stress threshold.

Out of the submissions made to the inquiry, the final report highlighted two extracts of testimony that featured criticism of Ararat Rural City Council.

Former councillor and Lake Bolac resident Frank Deutsch told the inquiry that farmers could not see the value in their rates.

“I am a firm believer in the user pays system. What value does the farmer get in the Ararat shire?,” Mr Deutsch stated.

“He does not go to look at the arts centre or look at what it buys or look at a picture or whatever is at the arts centre. He does not get any value from that. 

“He gets value from the road which goes past his property so he can send the sheep to the market and so he can send the wheat to the market. That is where he gets his value from.”

Australian Services Union special projects officer Tony White blamed higher rates in decisions to increase executive pay rather than for lower-level workers, and extra spending on lawyers and consultants.

“If I could give perhaps one example, in the Rural City of Ararat, their rate increase was 2.5 per cent last financial year, the wage increase that was in their EBA as of 1 July this year was 1.75 per cent and their wages as a percentage of total expenditure was about 40 per cent,” Mr White stated. 

“So you can see that the real effect on the budget is around 0.8 per cent from the wage increase, and the rate increase has gone up two and a half. So the extra money is not going into workers’ pockets.”

Mr Bawden said he would not respond to the two submissions as they were personal opinions and had not been submitted directly to the council.

“Given the report was released on Good Friday, councillors haven’t had the opportunity to discuss the final report’s recommendations,” Mr Bawden said.

Read the Parliamentary report here

Submissions available for viewing via the Parliament of Victoria website

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