Ratings guide doesn’t rate: MAV

By Julian Bajkowski
The Municipal Association of Victoria (MAV) has taken the state government to task over what it claims are “serious shortcomings” revealed in draft differential rating guidelines.
A new submission by the MAV urges the Napthine government to adopt “greater support to develop rating strategies” as the state’s local government sector attempts to gain certainty over how revenue is raised.
Bill McArthur, MAV President said it was troubling that the guidelines attempted to address “a perceived problem” and tried to impose “prescriptive rules beyond the powers conferred on the Minister.”

“The MAV is supportive of efforts to provide more guidance to councils in their treatment of differential rates,” Mr McArthur said.

“However, if the Victorian Government wishes to deliver meaningful support to councils, the ministerial guidelines should focus on pricing policy, including best practice rating strategies.

“The non-discretionary rules that have been drafted in the guidelines appear to restrict the autonomy of councils in raising rates revenue,” Mr McArthur said.

The MAV’s main gripe is that the guidelines could prove “inoperable.”

“We hold serious concerns that they will undermine the achievement of equity, a primary principle that informs council decisions about differential rates,” Mr McArthur said.

The peak group singled out what it called “attempts to appease certain interest groups, unfair or favourable treatment of certain property classes, and the potential for a council to be left short of its budgeted revenue if a differential rate prohibition is imposed after the rate is declared.”

According to an MAV statement local government collects 3.5 per cent of all Australian taxation revenue, a new high water mark.

“Differential rates are one tool which can ensure property owners are contributing their fair share of rates based on principles of achieving equity and efficiency for the whole community. Differential rates operate alongside the municipal charge, user charges and other fees and fines collected by local councils,” an MAV statement said.

Mr McArthur said the MAV had “urged the Government to seize the opportunity to provide greater support to councils in developing their broader rating strategies in line with recent Auditor General recommendations.”

“Encouraging rating strategy best practice is a far more beneficial project than attempting to constrain councils’ use of differential rates to fix a perceived problem in some areas of the community,” Mr McArthur said.

“Among the areas where the State could offer improvements to the rating strategy development process include guidance on councillor input and timeframes, milestones, improving understanding of taxation principles and concepts, rate modelling options and public consultation processes,” Mr McArthur said.

“We would welcome the opportunity to work cooperatively with the Victorian Government to deliver a comprehensive package of useful guidance material to assist councils,” he said.

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