South-west farmers accuse Glenelg Shire of ‘cash grab’ as council moves to differential rates system

A change to the way a local council organises its rates will see locals paying 20 per cent more this year. In one farmer’s case, that’s a rise of $15,000.

Farmers and residents in Victoria’s south-west feel “unbelievable concern” at a possible effective rates increase of more than 20 per cent because of a change in the way their council handles the annual payment.

More than a decade ago, Glenelg Shire introduced a rebates system, which involved refunding primary producers 30 per cent of their rates.

In 2021, the council voted to abolish that system in favour of a differential one, in which there are different rates in the dollar depending on land category.

It is unclear why the rebate system was introduced in the first place, but a Glenelg Shire spokesman said the decision “had a profound and detrimental impact on Council’s finances”.

“Maintaining a rebate at that level was not sustainable long-term and in its current form, the rebate is also in contravention of the new Local Government Act 2020,” he said.

“As a result, in 2021, councillors voted to transition to a differential system to resolve these historical financial issues.”

The council’s 2022/23 budget, adopted in June, raised general rates by the legislated 1.75 per cent cap and offered a rate differential of 0.7 to primary producers, but it excluded the old rebates as part of the new system.

The previous primary producer rebate was worth $3.429m, and now ratepayers are worried they will be slugged with the amount they used to be refunded on top of the legislated cap increase.

Former Southern Grampians Shire mayor Howard Templeton, who is a farmer and member of the Fair Go for Glenelg Shire Rate Payers group, said under this year’s budget his rates would increase from $25,000 to $40,000.

“On average the ratepayers are going to be paying at least 20 per cent more, at a time when we’re coming out of Covid and businesses have all sorts of problems,” he said.

“They [the council] would normally be able to raise about $500,000. They have raised their rates by eight times that.

“They’ve stuck $3.5m as well as the rate cap on top of what they received last year, and it’s caused unbelievable concern right throughout the shire.”
He said when rates notices go out he believed there would be “an absolute outcry”.

Meetings held by the Fair Go group in Portland, Heywood, and Casteron about the situation attracted up to 70 people each.

Mr Templeton said there were about 200 at the council budget meeting itself, which required a deciding vote by the mayor for the budget to pass.

“There were some people that left the meeting crying because they didn’t know how they were going to pay their rates,” he said.

“There were plenty of residents that would be expected a $20 or $30 rate rise and they're getting a $200 or $300, some a $700 rate rise.”

The rebates, Mr Templeton said, were an “accounting measure” applied to rates in the first instance — in effect, pushing down taxes before any money had exchanged hands.

Victorian Farmers Federation president Emma Germano said the council never actually collected the pre-rebate figure since the rebates were applied before collection, so the budget looked like a “cash grab” for $3.5m.

“What they’re doing is saying to the government that they were always collecting [a certain amount of money] even though they gave back a rebate,” she said.

“So this year, technically under the rate cap, they haven’t gone over it, but what the ratepayers are saying is, ‘You weren’t collecting these rates from us and now all of a sudden we’re seeing upwards of a 23 per cent increase in farm rates and a 20 per cent increase in residential rates.’

“Our argument is that you were never collecting those, it shouldn’t have been reported that you were collecting those, and therefore your 1.75 per cent [rate increase] should have been on the net amount after the rebate was offered.

“We’ve urged the council: this is not the year to go looking for your extra $3.5m. You never collected it before; do a budget where you don’t have to collect it now.”

A spokesman said the council was listening to residents and considering their opinions.

“Many of the community’s comments fall outside Council’s scope of power, such as the valuation process and the dramatic increase in property values in regional areas,” he said.

“However, we will seek to resolve their concerns as best as we can.”