Farm rate rises hit double-digits: driven by soaring land values

Draft 2023-24 council budgets are being rolled out, showing most are proposing farm rate hikes that reflect soaring property values.

Wangaratta Council wants to lift farm rates by 17.51 per cent, while rates for businesses are cut by 7 per cent.

Soaring rural land values have driven 2023-24 farm rate rises into double-digit territory, despite Victoria’s fair-go rate cap being set at 3.5 per cent.

A 30.1 per cent surge in dryland farm values has prompted Swan Hill Rural City Council to draft a 2023-24 budget that hits its grain growers with 20.8 per cent rate hike.

Mildura Rural City Council has signed off on hitting its farmers with a 13.1 per cent rate hike, while it slashes residential rates by 4.5 per cent.

At their last meeting Mildura councillors said they were rebalancing rates in a bid “to improve the alignment to the wealth tax principle – being rates paid are dependent upon the wealth of the landowner”.

Yet further south in the Pyrenees Shire, where grain and livestock producers have seen their properties’ values surge by 21 per cent in the last year, the council is only proposing a modest 2.36 per cent rate rise for farmers.

In Victoria’s northeast, the Rural City of Wangaratta wants to drag 17.5 per cent more out of farmers’ bank accounts than it did last year, on the back of a 43 per cent surge in rural land values, but is cutting town businesses’ rates by 7 per cent.

In contrast the adjoining Alpine Shire’s draft 2023-24 budget proposes raising farm rate revenue by just 3.82 per cent, after its rural land revaluations barely moved, rising just 0.3 per cent.

On the coast, where land values have soared, the South Gippsland Council proposes jacking up farm rates by 14 per cent on the back of a 30.38 per cent hike in property values.

Nearby Baw Baw Shire is pushing for an 11.18 per cent hike in farmer’s rate contributions, on the back of a 16.52 per cent jump in rural property values.

Manangatang grain grower Christine Plant says Swan Hill Rural City Council rural rate rise of 20.8 per cent for dryland properties is nearly six times the ‘fair go’ rate cap

The lack of consistency across councils has frustrated farmers, with Manangatang grain grower Christine Plant saying she just did not understand why they were “getting slammed”.

“My main concern is the increases are not being shared proportionately,” she said.

The latest rate hikes have highlighted what the Victorian Liberal-Nationals call an unsustainable funding model for councils, which has led to the Opposition gaining the numbers it needs to launch an upper house inquiry into local government funding and service delivery.

Victorian Nationals Leader Peter Walsh says its time to examine the whole funding model of local government, which he says is unsustainable.

Nationals Leader Peter Walsh said “it’s about more than just looking at council rates, we have to go back to square one and examine the entire funding model for local government”.

The Legislative Councils Economy and Infrastructure Committee will complete the inquiry and deliver recommendations to the government by 30 June 2024, based on considering the:

EFFECTS of cost shifting from the state and federal governments to local councils;

WHETHER local councils are adequately delivering on their core service delivery objectives;

OVERALL revenue structure of local government; and

WHETHER the existing revenue structure is sustainable and appropriate or if alternative models of funding would be better.