A FARMER in Goornong had a 27 per cent rate increase last year and regularly hears from others grappling with a system he says is better suited to the 19th century.
Farmers' frustrations with councils' rates rises have been raised in Bendigo with members of a ministerial review into the systems' fairness and equity.
Basing council rates off of land values made sense in the mid-1800s when incomes and properties were more closely intertwined, farmer Ross McKinstry said.
"But now the economy has gone off in all different directions. You can have someone go off into the share market and earn multiple squillions of dollars," he said.
"Alright, they are paying income tax but at a local level they are paying virtually nothing, depending on what house they live in.
"To me the whole thing needs to be overhauled."
Farmland is rising in value around Bendigo and attracting higher council rates, but that is not because farmers are getting wealthier, Mr McKinstry said.
"In my area a lot of that is to do with the growth of Bendigo, not farming," he said.
"Rates go up with land valuations. But land valuations really have nothing to do with what you get out of the business."
Mr McKinstry said his rate hike was the largest increased cost to his business in the last 12 months.
"Nothing has increased anywhere near that (27 per cent) rate," he said.
Beck Hamilton owns land across the Bendigo, Mt Alexander and Corangamite shires and has seen her rates go down in the last six years, but had been slugged with a 25 per cent increase in 2011 and other large rate rises since 2007.
"I think you need to look at better funding from the federal government in order to redistribute wealth from cities into regional areas," she said.
Frustrations are not confined to central Victoria, the ministerial review's chair Kathy Alexander said.
"We've found that with people in many rural regions," she said.
Councils originally spent rates money on services like roads, but their role had expanded over time to a range of other services with no relation to properties, Mr McKinstry said.
"To own property requires resources like roads and garbage collection and you should still have to pay for them," he said.
"An alternative is pretty simple, rate anything related to property and tax any other services - which in a lot of cases have been shunted onto councils from the state government.
"Why can't that tax be collected by the federal government and given back to councils?"
Councils across Victoria bring in 16 per cent of their revenue from state and federal governments already, according to the Victorian Auditor General's office.
Fifty-four per cent comes from rates, municipal charges and waste charges, while the rest comes from a mixture of fees, fines and other revenue streams.
The review's members are yet to form opinions on what should change in their wide-ranging inquiry, Dr Alexander said.
What was clear from consultations so far, she said, was that there was confusion about the cap, with many people assuming it applied to their properties and not council's overall revenue.
"We've already taken notice that there needs to be a bit of an information campaign (about that)," she said.
Forty-five out of 48 Victorian regional councils offered lower "differential rates" to farmers, but were constrained because they could be no less than 25 per cent of the highest rates they charged, a 2018 Victorian parliamentary review found.
The City of Greater Bendigo's farm rate was chosen "to take account of the restricted access to many city services", the council told that review.
The rate was also a way of encouraging farmers to continue on, recognise that weather made their profits more fragile than other businesses and that more land was needed to turn a profit, the council told the 2018 review.
Bendigo's council confirmed it planned to make a submission to the latest review in consultation with its farming advisory committee.
The review is in its early stages and Dr Alexander encouraged people to take a survey and submit feedback.
"We have received 800-900 responses so far, so we are starting to get a good view of community sentiment on some of the issues we are asking about," she said.
No matter what might end up changing, Mr McKinstry just wanted something fairer.
"Everyone should be contributing, whether you are investing in land, share markets or you have a $500,000 CEO's job. It doesn't matter," he said.
"It should come back to that we are all trying to provide a community service. Then we all benefit."
For more information on the review, visit https://engage.vic.gov.au/rating-review
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