WIMMERA councils could be impacted by changes to the local government rating system after the state government took the next step in establishing an independent rates review.
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The state government made an election commitment last year to implement a review into Victoria's rating system, and gave it the green light in April.
Local Government Minister Adem Somyurek on Tuesday tabled the government's response to the Parliamentary Inquiry into the Sustainability and Operational Challenges of Victoria's Rural and Regional Councils.
The Inquiry's first recommendation was to undertake an independent review into the rating system. The government allocated $600,000 for the review in its 2019-20 Budget.
Mr Somyurek said the review would ensure councils were held accountable to ratepayers.
"Over the past few months I have visited 18 of Victoria's smallest shires to see first hand the work they do to support their communities. Every one of the shires I visited showed passion for their area and work hard to make sure their services reflect the needs of their community," he said.
Another recommendation of the Parliamentary Inquiry was that the state government establish a new grants program to assist small rural councils to deliver core services.
However, the state government did not support the recommendation, citing that it had allocated $20 million in its 2018-19 Budget for targeted funding program, the Rural Councils Transformation Program.
Read the full Inquiry response below:
About the rates review
AN independent panel will undertake the review.
It was announced on Tuesday that Commissioner of the Inquiry into Ararat Rural City Council, John Tanner, had joined the rates review panel.
The independent panel will look at:
- Current local government rates and charges
- Rating exemptions and concessions and their application to various classes of land, including farm land
- The autonomy of local governments to apply a rating system that takes into account local factors
- Current exemptions and discounts for local government rates the impacts any recommended changes would have on councils, ratepayers and residents
The Fair Go Rates cap will remain in place.
The government says consultation for the Local Government Rating System Review will commence "later in the year".
Victorian residents will be able to put their views to the panel and participate in the review process, with the panel to deliver its recommendations to government in March 2020.
Wimmera leaders respond
SPEAKING to the Mail-Times in April, Horsham Mayor Mark Radford said the Horsham Rural City Council welcomed the review.
"It's important to realise that our municipality, living where we do in the state, relies heavily on rates to be able to finance our budget," he said.
"In the country compared to the city, the balance of how much comes from rates and how much comes from government grants should be equalised better. It's fair to say that most people would think we pay too many rates.
"I hope the rates review will ask those broader questions such as: how much do we value people who live in the country and whether we're supporting them enough. I will be disappointed if councils lose the ability to be able to adjust the rates within different categories."
READ MORE: Farmers furious over 11.8 per cent rate rise
Victorian Farmers Federation president David Jochinke, of Murra Warra, said the VFF was frustrated by the delayed timeline of the rating system review.
"It (took) five months for this promise to be actioned and now we discover that rural and regional rate payers will need to wait another year for the report to be delivered," he said.
"Farmers have experienced rate increases of over 50 per cent. While farmers absolutely want to contribute to their local communities, they should not be underpinning the council's operations, particularly when many of them do not receive council services provided to townsfolk."
Current rating system for the Wimmera's councils
HORSHAM council passed a motion at its March meeting to change its farm rate differential from 80 per cent to 67 per cent of the general rate to help ease the rate burden carried by the farming sector.
Rates have been a contentious issue for the council after rates rose to the capped increase of 2.25 per cent in 2018-19. However, a breakdown of the rates meant residential rates decreased by 0.6 per cent, while farm rates increased by 11.8 per cent.
Last month Horsham council released its draft 2019-20 Budget for community consultation with a general rate increase of 2.25 per cent.
A breakdown of rate impacts for individuals showed that the change for residential ratepayers would be 9.19 per cent, while rural ratepayers would see a change of -5.83 per cent.
Commercial ratepayers would experience a 2.32 per cent change, while industrial would be a 2.69 per cent change.
Ararat Rural City Council has proposed a general rate rise of 4.5 per cent. Industrial rates will rise by 5.64 per cent, commercial rates will rise by 2.79 per cent, and farm rates will rise 2.46 per cent.
This falls to an average rate rise of 2.5 per cent, which aligns with the rate cap.
Northern Grampians Shire Council has also raised its rates by an average of 2.5 per cent.
Residential rates will rise by 2.97 per cent, commercial rates will drop by 1.49 per cent, industrial rates will drop by 3.39 per cent, and farm rates will rise by 2.95 per cent.
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