THE Victorian Farmers Federation (VFF) has laid bare the ineffectiveness of the Victorian Government’s local government rate capping policy to protect farmers, with recently announced council budgets demonstrating farmers continue to get the raw end of the rating stick.
VFF President Emma Germano stated that rate capping had failed to stop some regional councils forcing rate increases onto farms.
“Councils are failing to use their differential rating power to equalise rate increases across different classes of land." Ms Germano said.
"The burden of funding local government is shifting more and more onto the agricultural sector.
“These tax hikes show that Victoria’s rate capping system is broken.
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“It is completely unfair to have rate increases exorbitantly high for one group of ratepayers, but have no increase or even a reduction in rates for others.”
VFF analysis of all council budgets for the year 2024/2025 shows 19 regional councils increasing farm rates above the state government rate cap of 2.75%, whilst residential rate increases remain at or below the cap.
“Unfair rate increases take money away from farmers investing in their businesses, growing more food and fibre and providing local employment opportunities," Ms Germano said.
"Ultimately this either drives up the cost of food or puts farmers out of business or both.”
The VFF’s recent submission to the Victorian Parliament Inquiry into Local Government funding and services recommended the government require councils to apply the rate cap to each class of land.
Ms Germano asserted the annual cap determined by the Essential Service Commission should be applied to residential, farming, commercial, industrial and any other differential land category.
“Increasing farmland values have no bearing on famers’ ability to pay exorbitant rates bills,” she said.
“The fundamental principle should be that as the value of farmland increases, the differential rate is adjusted to reduce the rate in the dollar so that the rate burden paid by the farm sector remains stable.
"This approach has been applied with great effect in the Ararat Rural City Council for the past seven years."
Ms Germano concluded that this system would ensure a fairer distribution of the rate burden between land types.
She stated that it would also put pressure on councils to look for greater efficiencies and cost savings rather than passing costs onto particular land types.
