Council rating system in dire need of reform

The Victorian Farmers Federation has called on the Victorian Government to scrap rates on farm land in a bid to fix an unfair council rating system that discriminates against primary producers.

The farmer group is urging a five year transition from the current rating system – based on total land value – to a new system that would see municipal rates only charged on the house and curtilage on a farmer’s land.

“Farmers are faced with an unfair burden because farm land is a means of production and its value bears little relationship to the farmers’ wealth or his capacity to pay,” VFF President David Jochinke said.

“Services like Airbnb have made it possible for anyone to make money from their property and it’s unreasonable to say farmers should be taxed more on their land because it’s a productive asset.

“You can’t assume that a farmer sitting on a large block of land is making a profit from that asset. Farms have increased in size to remain viable and this has compounded the rating burden.”

Analysis completed by the VFF on the 2014/2015 financial year showed farmers were paying on average two and a half times more in council rates than other local businesses.

“Farmers are paying over $4,000 more for their businesses than shops, cafes and other local businesses simply due to the model of striking rates based on land valuations,” Mr Jochinke said.

“This system does not take into account the revenue generated by farms and in a lot of instances puts undue financial stress on farmers.

“It is becoming impossible for farmers to pass on increases, especially when they don’t receive the same benefits for their rates as other businesses, which is causing a lot of frustration and anger in rural communities.”

The call comes as Ararat Rural City Council moves to force a uniform rating system across the shire, which would see farm rates skyrocket by 45 per cent.

Mr Jochinke said the VFF had fears the move, if successful, would lead to more councils pushing for uniform ratings systems at the expense of farmers, with Gannawarra Shire Council also set to vote on a new rating strategy.

“As farmers we carry the greatest rate burden in regional Victoria, because we own more than 60 per cent of the State’s land,” Mr Jochinke said.

“Forcing farmers to pay an ever increasing share of the rate burden isn’t sustainable and in some cases is driving farmers off some of the State’s most valuable agricultural land.”

Source: VFF