Mildura council food bowl tax: Mildura farmers hit with 13.1% rate hike

Farmers in Australia’s most productive food bowl are about to be hit with a 13.1 per cent rate hike, just three years after emerging from drought.

Mildura councillors are set to hit farmers with hefty rate hikes, despite the shire being the most productive agricultural region in Australia, underpinning the economy and jobs.

Mildura Rural City Council is set to hit farmers in Australia’s most productive food bowl with a 13.1 per cent rate hike, while it slashes residential rates by 4.5 per cent.

The proposal has stunned farmers across the region’s irrigated and dryland farming community, where many are already paying rates of $15,000 to $40,000 each year.

In its Revenue and Rating Plan Review, the council stated it had considered 14 rating options, before declaring its preference “to increase the share of income raised from business and farming differential rates”.

“The average residential rate will decrease by $80 for the 2023/24 financial year, the average farmland rate will increase by $463 and the average business rate will increase by $170,” council reported.

But councils’ calculations are based on the average increase per assessment, which fails to recognise most farms consist of several blocks of land on separate assessments.

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Ouyen farmers Leonard Vallance said a 13.1 per cent hike on his $40,000 rates bill was an outrage, given it would add more than $5000 to operating his grain and beef enterprise.

Digging further into council’s review reveals it considers rates a wealth tax.

“The wealth tax principle is a key consideration – being rates paid are dependent upon the wealth of the landowner – as well as principles of equity, efficiency and simplicity,” the council reported.

Council officers consulted the AEC Group of consultants as part of the review, who found “the average residential rate of $1,772 per year was 2.53 per cent of the median household income ($69,924).

“AEC Group advice is that this percentage is relatively high and, where possible, Council should consider options to reduce rates on residential properties,” the review states.

“The total rates received by productive industries (farmland and business) as a percentage of the total gross operating surplus generated is 2.4 per cent, which is relatively low, and where possible, Council should consider options to increase rates on farmland and business properties.”

The council’s review also argued householders were shouldering an ever greater share of the rates burden: “Since the 2019 financial year, the share of the general rate has increased for residential properties from 57.82 per cent to 64.72 per cent in the current 2023 financial year.”

But the comparison fails to recognise that in 2019, residential ratepayers were the biggest contributors to the council’s municipal charge, which represented 4.67 per cent of its rating income, bringing their total contribution to more than 62 per cent.

In 2020, the council dumped the municipal charge, under pressure from ratepayers, which it then simply offset by lifting the residential contribution to 63.11 of the rate pool.

Meanwhile the rate burden on local businesses in Mildura and surrounds has fallen from 22 per cent in 2020 to 17.93 this financial year.

Yet council is only proposing to raise business rates by 3.5 per cent.

Mildura City councillor and Werrimull farmer Ian Arney said “rates should not be based on the assumption that wealth reflects income”.

“There’s a big difference between a farmer turning over $3 million and earning a profit of $150,000, compared to a business professional in Mildura earning $3m and keeping $1.5m,” Mr Arney said.

Councillors are due to adopt the farm rate hike next Thursday, after putting the proposal out for public consultation last month.