It is unable to provide objective evidence that discounted rates for farmers or extra costs for businesses are helping people in need, council financial manager Nathan Morsillo has acknowledged.

"It is a very blunt mechanism, I will say," he said.

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The comments come in the wake of a state government rates review which found many Victorian councils have the same shortcoming on a key policy supposed to help those unfairly affected by rate costs.

Farmers pay 15 per cent less than the ordinary ratepayer on the assumption that they have a lot more land and probably have less access to services, while businesses pay close to double.

Bendigo introduced this so-called "differential rates" system in 1995 but the land tax dates back to 16^th century England.

The recent Victorian rates review does not call for the system to be dramatically overhauled but does say it could be fairer if, for example, councils used more rebates, waivers, and deferrals on rates bills.

All would allow councils to better target relief to people doing it tough, review authors said.

Councils have the legal authority to use those tools but do not always widely embraced them. Even now, Bendigo's council has declined to waive small business's rate bills, arguing it could impact council services or push the burden onto other residents.

It did, however, ramp up the number of bills it deferred when the pandemic hit and also already had concessions and discounts rewarding people for paying bills on time, investing in bushcare or having a hanger at the Bendigo Airport.

Below: a fact sheet published alongside the review.

Mr Morsillo warned that any changes could push up administrative costs or make it harder for ratepayers to navigate the system.

"We are not the Australian Tax Office and we are not set up for that. We are not going to try to track whether someone has made more this year than last," he said.

"I know that's me being deliberately silly and taking it to an extreme, but I have a small rates team and we are talking about an area encompassing 60,000 assessments plus a year.

"The city's up for the conversation but everything needs to be efficient and clear."

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Mr Morsillow said the council is digesting the reviews' findings, which could inform thinking during a 2021 annual review expected to probe more deeply this time around as newly elected councillors form their thoughts.

Ultimately, the review noted that no matter how much the rates system was modified governments and councils would need to find other ways of addressing inequality.

It added that there was a risk any reforms would be too small to efficiently deal with problems like property market volatility, access to services in rural areas or the large costs that country councils bear for roads and other infrastructure.

After all, council rates only make up three per cent of all taxes Australian governments raise.