country-rates-rortMandy Evans of Wonthaggi agrees that country people are paying too much in rates compared to people in the city.

By Michael Giles

WHY should an average wage earner in Leongatha be paying up to $1000 more in council rates than his or her city cousin?
It’s an issue that has received only passing interest, in the run up to the State Election, since Daniel Andrews kicked what the Municipal Association of Victoria President, Bill McArthur, described as a “spectacular own goal” in May this year by promising to cap shire rates at the CPI.
It’s effectively what is already being done with water authority budgets.
But it still doesn’t get to the heart of the matter of what it costs to run rural councils and who pays.
Here’s what we are talking about.
Eighty three year old Edie Pearce lives in a lovely three bedroom brick home that she and her late husband established in Dandenong in 1987 for around $100,000.
Now it’s worth $450,000 and she received a rate bill this year for $1389.22 (less her pensioner rebate of $258) but $1389 is the relevant figure.
The owner of the same value house in Leongatha is paying a whopping $2599.50 this year in rates, more than $1200 extra… for what?
Even when you compare apples with apples, a three bedroom brick home in Leongatha, with Ms Pearce’s modest three bedroom home in Dandenong, you’d still be paying $600 more in rates annually.
In Wonthaggi, retirees Mandy Evans and her husband Jeremy, are paying more than Mrs Pearce on a lower value but similar home.
Their rates, on their brick veneer home in Wonthaggi North, valued at $313,000, are $1520.06 almost $150 more than the Dandenong example, and that’s in one of the lowest rating municipalities in country Victoria, Bass Coast.
The owner of a $450,000 home in Wonthaggi would be paying $2006.37, or $600 more than his Dandenong counterpart.
“It’s wrong,” agrees Mrs Evans.
So why the difference?
We asked out-going Bass Coast Mayor Cr Neil Rankine.
“It comes down to what the people want the council to provide,” Cr Rankine said.
“And the population; we’ve got a lot fewer people here than Dandenong but we are trying to provide something like the same level of services.
“We’ve also got 1200km of rural roads that we are trying to look after that we really can’t afford to maintain.”
South Gippsland has 1300km of unsealed roads and 780km of sealed roads that it has to maintain.
“We’re going to have to look at closing some of those roads in the hills in the future but I don’t suppose that would go over too well,” Cr Rankine said.
Cr Rankine agrees that the country road network around Bass Coast has just as much relevance to people in Dandenong as it does to residents of Wonthaggi or Phillip Island – so why shouldn’t they share equally in the cost of its maintenance?
“They need the milk and beef coming off those farms the same as we do.”
Cr Rankine said there had been a significant amount of cost-shifting from other levels of government to local government, for such things as libraries and infrastructure like rubbish services and municipal swimming pools, but noted there were fewer people in the country to pay for it.
“It all gets very political.
“We’re looking at a pool refurbishment in Wonthaggi, servicing 20,000 to 35,000 people, but the same pool in Dandenong would serve 100,000-plus residents. It all comes down to efficiency.”
He acknowledges that country people are paying more in rates, but should it be the subject of a State Government inquiry?
“The State Government is already looking at the financing and provision of services (by local government) and our reporting requirements have just got a lot more onerous. We need to employ five people full time just to provide them with the information they want.”
Cr Nigel Hutchinson-Brooks takes a different tack.
“It’s still a lot cheaper to buy a house in the country than the city,” he said.
“You might pay more rates here but that’s more than compensated by the fact that you don’t have to borrow so much to get into the house in a metropolitan area the first place.”
That’s cold comfort for those who already own their home in the country and see the rates going up and up.
He is also horrified to think that Labor plans to cap rates at CPI, which he claims will be impossible to do without “drastic cuts to services”.
“It would be an absolute disaster.
“Take the Foster Swimming Pool for example. It’s the worst performing pool and by rights should be closed, leaving Toora as the main pool for the area but it’s the number one issue being supported on the ‘Your Say’ website.”
He said the decision by the Federal Government to freeze their Financial Assistance Grants to local government for the next three years was another example of government slugging ratepayers.
“Every time the Federal Government and State Government get squeezed, they think they’ve got this wonderful new taxation supply called rates.”
Something’s rotten about the level of rates in country areas that is a symptom of waste, inefficiency and a lack of accountability by shire bureaucracies but is also the result of cost-shifting by other levels of government.
Who’s going to change it? Who even cares?

Rates-Rort

This graph shows that even for similar houses, people in the country are paying much more rates than their city counterparts, effectively paying more in tax, and there’s also a wild variation between rural councils with South Gippslanders being hit harder than Bass Coasters.