Hume council is owed a record $47m in overdue rates. But there’s a radical plan to fix it

A council in one of Melbourne’s poorest regions will investigate cutting rates for home owners and jacking them up for commercial and industrial properties, as it grapples with an unprecedented failure to keep up with payments.

The City of Hume, in Melbourne’s north, was owed “an all-time high” of $46.59 million in overdue council rates by December 31, 2024, council documents show.

Hume City Council’s Sam Misho is pushing for a cut in council rates for home owners, to be paid for by raising rates for businesses.Credit: Joe Armao

More than one in four Hume home owners are in rates arrears, with the issue reaching a point where it is affecting the council’s cash flow, according to a budget report due to be debated by the council this week.

In total, 25,056 out of 97,500 residential and rural ratepayers in Hume are in arrears. The proportion is lower among commercial and industrial property owners, 18 per cent of whom are behind payments. Hume takes in a mix of booming and socioeconomically disadvantaged outer suburbs, including Broadmeadows, Craigieburn, Mickleham and Kalkallo.

“The current economic conditions have impacted on the collection of rates compared to previous rating periods due to higher inflation and interest rates influencing the cost of living,” the council report says.

Craigieburn was identified in a report by S&P Global Ratings late last year as experiencing the highest rate of mortgage stress in Australia.

The motion to investigate a differential rating system was put forward by councillor Sam Misho this month, who argued that Hume’s current “blanket approach” to calculating rates inequitably penalises home owners, ignoring the fact that business owners use their properties to generate profits.

“Just because you’ve got a property that is worth $1 million, it doesn’t mean that you’re rich,” Misho, an accountant in his day job, said.

Home owners struggling with high interest rates and an increased cost of living should not be taxed at the same rate as a commercial property owner using the premises to make income, he argued. “For me, it doesn’t make sense.”

Misho conceded that raising rates for commercial and industrial property owners could risk driving investment out of the area, but argued his proposed overhaul was a matter of fairness.

CSL Behring’s plasma fractionation facility in Broadmeadows is in Hume councillors’ sights after posting a $2.1 billion half-yearly profit.Credit: Joe Armao

The motion was unanimously endorsed by Hume’s 11 councillors, with Naim Kurt singling out one of the area’s biggest employers and suggesting they should be targeted for a rate increase.

Kurt said pharmaceutical giant CSL Behring, which manufactures plasma products in Broadmeadows, was a company that could afford to pay significantly more in council rates.

“They’re making $3.5 billion every year in profits and they have got a property which is valued at over $200 million, and so they are probably paying about $300,000 to $400,000 in rates every year, but I think there is a lot more that they could be paying,” he said.

CSL Behring announced its half-year results to shareholders this month, reporting a $2.01 billion profit for the six months to December 30, up 7 per cent.

A spokesperson for the company said the Broadmeadows facility employs almost 2000 people, spends millions with local suppliers and earns export revenue for the nation.

“We will review any ratepayer reforms proposed by the City of Hume and discuss this with them collaboratively as an active supporter and significant contributor to our local community,” the spokesperson said.

The Allan government has set a 3 per cent rate cap for 2025-26.

A council spokesperson said officers are “currently investigating the notice of motion brought by Cr Misho regarding the options and scenarios on how differential ratings may impact the distribution or allocation of rates across the various classes of properties within Hume”.

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