Rural rate reform: Minister Shaun Leane sidesteps taking action

Averaging property valuations over several years would help ease farmers’ skyrocketing rates. But the Andrews Government has yet to go near it, despite early support.

The Andrews Government promised in 2020 to look at ending rate volatility, but Local Government Minister Shaun Leane failed to introduce valuation averaging in legislation tabled in parliament this month.

A strategy of averaging valuations over three to five years to ease the rural rate burden on farmers has been left in the too hard basket by the Victorian Government.

A March 2020 Local Government Rating System Review recommended “the Victorian Government examine the merits of a valuation averaging mechanism to reduce the impact of large changes in valuations on rates”.

At the time the Government responded by stating it supported “in full” the recommendation, stating it “has the potential to address the uncertainty caused by rate volatility arising from large movements in valuation year on year”.

Yet the reform was not included in the Local Government Legislation Amendment (Rating and Other Matters) Bill 2022, introduced to parliament this month.

Local Government Minister Shaun Leane’s office sidestepped the issue, stating “implementing such a mechanism requires extensive modelling and will be explored in consultation with councils and ratepayers.”

MP Shaun Leane’s office has avoided the issue by placing it in the ‘too hard’ bin. Picture: NCA NewsWire / David Crosling

The Minister reiterated “the Government fully supported the recommendation to examine the merits of a valuation averaging mechanism for rates to lessen the effect of sudden rates increases by spreading them over several years.

“We know that many Victorians are doing it tough and that’s why we are working to reform the rating system.”

But that’s cold comfort to farmers who’ve see their rate bills skyrocket in recent years.

Analysis of one Wellington Shire farms four rate notices, shows its value had risen from $5m to $5.5 million over four years, until 2020-21 when it was revalued at $9m.

The Darriman farmer’s rates went from $22,796 in 2019-20 to $37,234 the following financial year.

If valuation averaging over three years had been in place the farmer would have paid $26,996, which is based on the same rate in the dollar.

While averaging is just one tool to help alleviate surges in valuations, it’s one the Victorian Farmers Federation has backed.

VFF member and Wellington Shire farmer John Buxton, who has spent years campaigning for rate reform, said valuation averaging would mean rates would not “go up quite as fast”.

But Mr Buxton said the VFF had long argued there needed to be a long-term fix for a rating system that was “outdated and broken”.

The VFF is calling for an equalised funding model, whereby the State Government sets a general rate for all property and redistribute funds collected from rates on the basis of equity and need.