“The local government rating system has failed Victorians and is producing inequitable outcomes for all ratepayers,” VFF president David Jochinke said.
The VFF submitted a request for an equalised funding model to the Victorian local government rating systems review.
This model involved redistributing local government funds across councils based on equity and need.
“Victoria’s rating system has created a situation whereby rural ratepayers pay more in rates as a percentage of the value of their property than ratepayers in metropolitan Melbourne,” Mr Jochinke said.
“You know the system is broken when a $300 000 property in Kerang pays $2400 in rates and a similarly valued property in Toorak pays just $390.
“What’s more, rural ratepayers receive and have access to fewer services from local government than ratepayers in the city.”
Mr Jochinke said the model would require the government to establish a state-wide rate in the dollar based on the valuation of all property.
“Revenue would then be redistributed on the basis of state-wide minimum service and infrastructure levels,” he said.
“Equity and need - similar to how the government already distributes GST money to local governments.”
Mr Jochinke said the model would help to create robust and transparent governance within the system.
“(It will) provide a sustainable funding base for disadvantaged rural councils and ensure all councils are more accountable for the dollars they spend,” he said.
“The VFF has also called for the reintroduction of minimum and maximum rates, alongside five year average valuations for property, separation of house and curtilage from farmland and mandatory differential rates for farmland.”