FARMERS shocked to see their annual rates notices balloon by more than seven per cent need a solution to unsustainable rate rises.
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The Victorian Farmers Federation is calling for a rethink on the local council rating system. We urge the government to abandon rates on farm land altogether.
The current rating system is flawed and too much of the rates burden is being shouldered by farmers.
The main problem is that the price of rates is currently tied to the value of land, which doesn’t accurately capture a ratepayer’s capacity to pay, nor the benefit that they receive from their land.
In many cases, the value placed on the property has little to do with the agricultural productivity of the land – rather how close it is to Melbourne or a regional centre, or amenity values.
Quite simply, land used for farm production shouldn’t be rateable.
Rates should be set based on the value of the house and the surrounding land only, with this method applied evenly across all ratepayers. The Victorian Farmers Federation outlined its fix to the rates problem plaguing rural Victoria in a submission lodged to government, including recommendations that:
- Land used for farm production should not be rateable.
- The use of a municipal charge should be a requirement for all rural and regional councils, with a minimum of 20 per cent of council revenue to be recovered through this charge.
- Local governments must implement farm rate differentials for farm land.
- The Fair Go cap on rates needs to be amended and should be applied at the rating category level (general, farm, industrial), rather than to a councils total rating pool.
We need to ensure the system changes and farmers aren’t disadvantaged with steep increases to their rates. After all, the government is keen to promote its ‘Fair Go Rates’ system, but a lot of farmers are having trouble seeing the fair side of it.
The Victorian Farmers Federation submission to the State Parliamentary Inquiry into the Sustainability and Operational Challenges of Victoria’s Rural and Regional Councils is available at www.vff.org.au/vff/Policy/Submissions/vff/Policy___Submissions/Submissions.aspx?
DAVID JOCHINKE
VFF President and Murra Warra farmer
