Scrap rating strategy - VFF

VICTORIA'S peak farming body has called on the State Government to scrap rating of farm production land.

The Victorian Farmers Federation believes that municipal rates should be confined to the house and surrounds on all farms.

The VFF plea comes as Gannawarra Shire Council considers widespread opposition to its plan to abolish a differential rates structure.

Council received 68 objections to its planned transitional move to a standard rate for urban residential, commercial and industrial, irrigation farming and dryland farming categories.

More than 100 people attended council's pre-budget submission hearing last week. Nineteen people, including a number of former councillors urged council to retain the differential rates system, which was introduced early this century after a bitter dispute that led to a Supreme Court settlement after farmers withheld rates payments for two years.

The VFF is urging the Victorian Government to implement a five-year transition from the current rating system – based on total land value – to a new system that would see municipal rates only charged on the house and curtilage [immediate surrounds] on a farmer's land.

"Farmers are faced with an unfair burden because farm land is a means of production and its value bears little relationship to the farmers' wealth or his capacity to pay," VFF president, David Jochinke said.

"Services like Airbnb have made it possible for anyone to make money from their property and it's unreasonable to say farmers should be taxed more on their land because it's a productive asset.

"You can't assume that a farmer sitting on a large block of land is making a profit from that asset. Farms have increased in size to remain viable and this has compounded the rating burden."

Analysis completed by the VFF on the 2014/2015 financial year showed farmers were paying on average two and a half times more in council rates than other local businesses.

"Farmers are paying over $4000 more for their businesses than shops, cafes and other local businesses simply due to the model of striking rates based on land valuations," Mr Jochinke said.

"This system does not take into account the revenue generated by farms and in a lot of instances puts undue financial stress on farmers.

"It is becoming impossible for farmers to pass on increases, especially when they don't receive the same benefits for their rates as other businesses, which is causing a lot of frustration and anger in rural communities."

VFF vice-president, Brett Hosking, who operates a farm at Oakvale, told Gannawarra Shire Council last week that imposing a huge rates burden on struggling broadacre farmers would diminish their ability to contribute to the community. 

Council will determine its rates strategy at a meeting on June 28.

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