Monash Council rate ‘reform’ petition

The principle behind the rating system is that as council services such as street maintenance, waste collection, parks and playgrounds (and the next redevelopment phase of Glen Waverley’s Kingsway) will all add incrementally to our land values, some of the uplift in property values is owed back as municipal revenue by way of rates in proportion to the value of properties . This is largely how Australian municipalities have grown and prospered over the years.

No longer. City of Monash councillors have decided that as property values “have skyrocketed over the past two years” rates need to be ‘capped’, especially for older residents. Therefore, Council is urging ratepayers to sign a petition calling on the State government to ‘reform’ Victoria’s ‘archaic’ rating system.

At first flush this seems commendable, but deeper reflection suggests the changes are misguided and will act to further distort the rating base and disadvantage ratepayers. Monash Council was the last Victorian municipality to fall into line with the State’s suggested ‘wisdom’ of moving from a rating system based upon the site value of land—a system fought for and maintained over many years amongst others by intrepid Oakleigh Ratepayers Association’s Allan James—to one which now effectively penalises the construction and maintenance of improvements. It has been the effects of this change which has brought about increased criticism of the City of Monash rating system.

Capping of rates is also mistaken. Much the same was done with California’s Proposition 13 in the US in 1978.  It doesn’t overstate the case to say that since that time California has morphed from being ‘The Golden State’ into becoming an economic basket case.

That property values “have skyrocketed” is not an issue as far as the rating system goes. The rate in the dollar struck by Council is the primary determinant of rates, and this can (and should) be reduced when property values increase significantly. Secondly, Council’s Financial Hardship Policy already carries rating deferral provisions for older people experiencing real financial hardship. So, the call by councillors for ratepayers to petition the State government for these changes is curious, to say the least. It seems to be just one more step in weakening property rates as a fair and equitable revenue base. The proposed changes Monash councillors are seeking ratepayers to endorse must eventually come to favour interests other than those of its general ratepayers.

Bryan Kavanagh

Mount Waverley