Farmers slugged again

Rates must be adjusted for farm values, they say

The Victorian Farmers Federation has laid bare the ineffectiveness of the Victorian Government’s rate-capping policy to protect farmers from constantly increasing rates.

The situation is of particular concern in coastal areas where speculative purchases of well-located farms are driving up prices beyond their commercial value.

VFF President Emma Germano, who operates a farm at Mirboo North, said rate capping had failed to stop some regional councils from forcing rate increases onto farms well in excess of what is reasonable or sustainable.

“Councils are failing to use their differential rating power to equalise rate increases across different classes of land. The burden of funding local government is shifting more and more onto the agricultural sector,” Ms Germano said.

“These tax hikes show that Victoria’s rate capping system is broken.

“It is completely unfair to have rate increases exorbitantly high for one group of ratepayers, but have no increase or even a reduction in rates for others.”

VFF analysis of all council budgets for the year 2024/2025 shows 19 regional councils increasing farm rates well above the state government rate cap of 2.75 per cent, whilst residential rate increases remain at or below the cap.

Among them are several Gippsland councils including Bass Coast (average residential increase 2.21 per cent, average farming increase 6.21 per cent), South Gippsland (Residential increase 0.05 per cent, farming 10.14 per cent) and Wellington (Residential 2.86 per cent, farming 5.36 per cent).

The statement from VFF head office is nothing new to Bass Coast VFF President Bill Cleeland who was one of only eight people to make a submission to the recent Bass Coast Budget process.

“We got a 20 per cent differential in place some years ago but with continual increases in rates, even at the rate cap level of 2.75 per cent, that has been completely eroded,” Mr Cleeland said.

“You need a lot of property these days to be able to make a commercial go of farming. It’s an income-creating asset but we’re getting taxed for it. It would be like taxing Harvey Norman for the number of refrigerators they have on the floor.

“It’s simply unfair to be taxing farmers on their capacity to make a living simply because someone down the road sold their property for an increased amount.

“The farm rate on the Mornington Peninsula is 35 per cent of the general rate, I think, but they’re still paying a lot of rates. We’re seeing farm values around the coast, from Inverloch to Phillip Island, going the same way as farms on the Mornington Peninsula and we really need to be adjusting the differential we have here.”

Mr Cleeland said he was pleased that the council at least acknowledged at budget time that there needed to be a review of the Bass Coast farm rate but he was disappointed it was scheduled to come after the elections.

Farming representative on the South Gippsland Council, Cr Scott Rae, acknowledged the increase in farm rates above the state’s rate cap and would be happy to see the shire’s farm rate reviewed.

Ms Germano said farmers shouldn’t have to fight the same battle year after year.

“The fundamental principle should be that as the value of farmland increases, the differential rate is adjusted to reduce the rate in the dollar on farms so that the rate burden paid by the farm sector remains stable. This approach has been applied with great effect in the Ararat Rural City Council for the past seven years.”