Fair go rate cap a boon for business but not farmers

The Andrews Government’s fair go rating scheme advantages city and town businesses ahead of farmers, a review by its own regulator has found.

Farmers’ council rates have risen, while those for town businesses have gone down under the fair go rates system. Picture: David Geraghty.

Four years of capping rate rises has been a boon for Victorian households and business, but done little for the state’s farmers.

Since 2015-16 household rates have risen by an annual average of just 0.3 per cent, while businesses have enjoyed an annual cut in what they pay of 1.3 per cent a year.

But a review by the Government’s own regulator, the Essential Services Commission, has found farm rates have continued to rise at 1.3 per cent annually over the four years to 2019-20, despite the cap.

“Rate revenue per property for rural properties increased faster than rate revenue from other types of property,” the ESC reported.

Average annual growth in rates by property type.

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The ESC analysis was averaged across the state’s 79 councils, which failed to expose far higher yearly rate hikes in rural ratepayers contributions to councils, of up to 15 per cent in recent years.

As it stands councils are able to crank up farm rates beyond the cap, while keeping the overall “average” increase for all ratepayers at or below the cap, which is 1.5 per cent for 2021-22.

It means that as farm values surge at a faster pace than properties in town, farmers are forced to bear an ever greater share of the rates’ burden in councils beyond the tree and sea-change boundary.

In Victoria’s far west Glenelg Shire farm values surged by 15.47 per cent last year, leading council to propose farmers contribute a third of its rate revenue in 2021-22, on the back of a 4.51 per cent rate hike.

Meanwhile the 10,022 residential ratepayers in Portland and surrounding towns are being offered a 0.91 per cent cut in their rates.

VFF vice president Danyel Cucinotta said the rate cap should be applied to each rating category — rural, residential and commercial — “that’s the only way to ensure fairness”.

“We know the rates cap doesn’t work because farmers deal with rate increases of 5 per cent and 10 per cent year after year,” Ms Cucinotta said.

“Some councils are doing the right thing and balancing the rate burden fairly, such as Ararat and Mansfield councils, but we can’t rely on all councils to do the right thing.”

The ESC review also showed that despite the cap, which usually ranges from 1.5 to 2.5 per cent each year, the ESC approved “above cap” rate increases of up to 5.5 per cent for eight rural councils, many of which were repeatedly applied over three to five years.