A REVIEW of the state's rates system will aim to create a fair, transparent and measured system after a state government inquiry found the burden of rates was unfairly distributed across the state, particularly affecting those in regional areas.
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Ratepayers can voice their opinion on how councils spend their rates as the Local Government Rating System Review begins.
An inquiry into the sustainability of Victorian councils published in early 2018 found structural changes were needed for municipalities to stay viable.
The distribution of the rate burden within local government areas could be unfair, with some groups paying much larger amounts than others, the review found.
Regional residents often paid higher rates in proportion to the value of their land compared to metropolitan residents, and often paid a larger portion of their household income, it stated.
The City of Greater Bendigo, the Central Goldfields Shire and Mount Alexander Shire councils called for a review of local government funding in late 2018.
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At the time Central Goldfields administrator Noel Harvey said the system was broken.
Mr Harvey said a one-size-fits-all model, in which rates for higher and lower density councils were calculated the same needed to change.
In 2015 the state government introduced a rate cap for all Victorian councils, meaning the minister for local government sets a maximum by which councils can increase rates, based on the Consumer Price Index.
City of Greater Bendigo chief executive Craig Niemann said in 2017 that rate capping had taken away council's decision making ability, as finance restricted how it could deliver plans for the community.
Mr Niemann said school crossings, community health services and some elements of statutory planning could be aligned to the relevant state or federal departments, to ease the financial strain on councils.
In 2016, the City of Greater Bendigo warned the government's 2.5 per cent rate cap would put pressure on the city to deliver services in future years.
Communities, councils, peak bodies and key stakeholders will be part of the consultation into rates and charges.
The panel is expected to share its findings with the Minister for Local Government by March 2020.
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Former chief executive of the Melbourne City Council, the Royal Children's and the Royal Women's hospitals Dr Kathy Alexander will chair the board.
Former chairperson of the Essential Services Commission Dr Ron Ben-David and former Brimbank City Council Administrator John Tanner will also be on the board.
Dr Alexander said Victorian ratepayers should know how their rates were raised and how the costs of council services were allocated across the state.
"Rates have existed as a major revenue source for local councils for many years, helping to fund important works and projects that enrich the community," she said.
"The rating system is complex and the result of many years of additions and different council practices, so one of our roles will be to demystify some of the major parts of the system.
"Our focus will be on identifying areas where the current rating system can be improved, and what changes can be made to how these charges are imposed on ratepayers moving forward."
Have your say on rates at: engage.vic.gov.au/rating-review
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