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Is your Anger Rising with Your Rates?

It’s late September 2020 and Maribyrnong Council Rate notices are causing anger and distress as they arrive in letterboxes and inboxes around the local suburbs.

Unrenovated houses with 10% rate increases. Pensioners trying to pay bills of $4,000. Angry Facebook posts are piling up quickly and thickly. And everyone wants to know why. Because it just doesn’t make sense.

Because it is not sensible. Rate calculations are based on greed, not sense.

Council spending. Council’s spending wishlist is the single biggest factor in determining individual rates. It is the starting point for the calculations.

The Rate Cap is misleading. The Cap applies to the total amount of rate revenue, not individual rates due. In Maribyrnong this year, (2020) Councillors approved a 0% rate increase (i.e total rate revenue was capped at the same amount as last year) - and some ratepayers are facing 10% increases in their rates.

Valuation company liberties. A company hired by the State Government values properties every year on January 1st.

  • This is a time of year when the market activity is high so prices are likely to be higher due to competition.

  • The Land Valuation Act says the valuer can value properties according to their “highest and best use.” So if you live in a single dwelling in a zone rated for medium density, your home can be rated as though it’s three double-storey townhouses.

  • There is no penalty on the company for incorrect valuations.

  • There is no statutory obligation on Councils or Local Government Victoria to keep records of the number of objections or the number of successful objections. You won’t find any data about this on the ‘Know Your Council’ website.

Income Irrelevance. The Rating System is completely divorced from homeowners’ capacity to pay. At public hearings into the review of the rates system, October 2019 in Melbourne, financial counselling groups told commissioners it’s reasonably common for Councils to tell elderly residents to add rates as a debt to their estate. In some cases, Councils will advise older homeowners to sell and downsize to lower their rates. And some Councils go to Court to seize property. There is nothing in the Local Government Act that requires any of the bodies in the rating system to take any notice of homeowners’ income and capacity to pay, in assessing the tax due..

Hardship Rejection. Councils will deny residents access to hardship based on Council’s ‘ongoing financial viability’ obligations in the Local Government Act. This obligation is NEVER used as leverage to cut waste, duplication, Councillor or staff luxuries, exorbitant wages, over-use of consultants etc etc. But if homeowners need lower taxes, Council uses financial viability as an excuse.

Council Protection by State Government. The Local Government Act provides no penalties for CEOs or Councillors who spend inappropriately. The Act gives homeowners no simple, effective way to complain about wasteful spending. And there’s certainly no way for ratepayers to prevent Councillors and the CEO from wasting money in the first place: they simply choose to ignore ratepayers and that’s it.

The reason I mention these things is because I have personally lobbied against most of these injustices.

For two years I have reviewed the Maribyrnong Council budget and made personal submissions suggesting cuts. I have attended most Council meetings over the past two years, and lobbied all the current Councillors to reject any individual items I thought were unnecessary. I have asked questions at Council meetings which have revealed ongoing expenses not easily found in budgets or financial statements.

I have lobbied MPs against the ‘highest and best use’ clauses in the Land Valuation Act. I made a personal submission to the Ratings System Review regarding the role of Council budgets.

I have personally lobbied local MPs about the Local Government Act and all the extra costs that it imposes on ratepayers including the outrageous decision to hand Councillors’ allowances to their MP pay mates at the Victorian Independent Remuneration Tribunal.

And I have exposed the fact that Maribyrnong and other Councils are hiding information from homeowners, to deny them access to cuts on their rates, as allowed under the Local Government Act. The Victorian ombudsman is now investigating this.

The only power residents have is to lobby state MPs and vote only for MPs who improve the laws to give residents more power.

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