Plans by the Golden Plains Council’s to increase its Municipal Charge from $225 to $300 will further increase the level of unfairness in its rates collection. The resultant drop in the Capital Improved Value rate will see some high end properties hundreds of dollars better off, but lower end properties will be paying more since this will fail to cover the lift in the Municipal Charge.
The increased rate revenue raised from properties in less advantaged communities like Linton, Smythesdale and Scarsdale in the north will in effect be directed to assist with rate reduction for properties in more affluent areas to the south like sections of Bannockburn and Batesford.
Approximately 5,500 properties in the Golden Plains Shire valued at less than $500,000 will pay to subsidise further rate relief for the 2,400 properties worth over than that figure.
This is simply not fair and needs to be called out.
It should also be asked why is the position taken by the Golden Plains Council so at odds with over half the Shires in Victoria who refuse to even have a municipal charge, along with the numerous others who have moved away from using it due to rightful concerns about a its impact on fairness? The State Government is currently seeking to cap the proportion of revenue raised from municipal charges to 10% of the total.
Indeed the Victorian Councils who do employ a municipal charge the average contribution it makes to their overall general rate collection is around 9%. The Golden Plains Council’s new budget will take its figure to 15.5%, far higher than all the surrounding Councils like the City of Greater Geelong whose figure sits at 6%, and of the City of Ballarat which doesn’t use a municipal charge at all.
The Mount Alexander Council spent three years phasing out its municipal charge because it deemed; “The municipal charge is regressive, which means that as the value of properties decrease, the municipal charge increases as a percentage of that value. As a result, the burden is reduced on higher valued properties.” Other Councils have followed the same path.
Yet the Golden Plains Council have decided to increase rates by the maximum allowable, but just changed who pays what by this increase in the municipal charge of 30%.
The ability to pay should be a central tenet of any decent, equitable taxation regime and financing local government through our rating system is a prime example. While it can throw up anomalies, especially in high growth areas, property values and the rates applied to them mostly reflect household income. High municipal charges erode that fairness and need to be avoided not increased.
Golden Plains Councillors should reflect on the impact the increase in rates will have on struggling households particularly within less affluent areas closer to Ballarat. A fair question would be if any of them were going to be worse off under the new charge.
This Council need to focus on ways to reduce the high rate burden for all residents not just of some at the expense of so many others. They have the tools to be far more targeted in delivering a fair rates mix rather than this crude and unfair measure. They need to use them.
Cameron Steele is a resident of Bannockburn.