Ratepayers Victoria Inc

Ratepayers Victoria welcomes the reforms to Local Government and commends the Premier on his actions. Whilst Ratepayers Victoria thinks this is a step in the right direction and addresses a number of our concerns we don’t think it goes far enough.

At present we don’t see that Inspectorate is independent enough with the formal power to do something about the misconduct of Councillors amongst themselves or to the communities that they are supposed to represent. With Councillor Matters to go to VCAT, we feel that this process will take too long for people to get a result, frustrating them even more. Ratepayers Victoria believes that there needs to be an immediate response to complaints about Councillor behaviour with an immediate outcome if proved correct.

Save our heritage

URGENT reforms are needed to planning legislation in Melbourne because the Victorian government has favoured development over heritage protection, and developers are ignoring height restrictions, density controls and setback limits.

Heritage groups including the National Trust, Melbourne Heritage Action, Art Deco Society, Planning Backlash and many residents' associations are calling for:

1. A review of the role and processes of Heritage Victoria. Its decisions cannot be appealed by third parties. The ''economic use'' clause in the Victorian Heritage Act 1995 must go.

2. Removal of the minister for planning's powers as ''responsible authority'' for CBD projects over 25,000 square metres.

3. No more ministerial ''instant amendments'' to the Melbourne Planning Scheme that facilitate large development.

The community expects that Melbourne's important heritage buildings will be protected by legislation and transparency in government processes.

Martin Purslow, National Trust Victoria CEO, and Rupert Mann, Melbourne Heritage Action president

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Policy off the rails

KENNETH Davidson's article, ''Incompetence reigns over rail extension'' (The Age, 1/11), makes clear the absurdity and policy mismanagement of public transport in Victoria under the current government.

The recently announced ''busway'' to Mernda (The Age, 28/10) demonstrates the government's panic in being seen to do something on public transport in the run-up to the election. It raises the farce to Sir Humphrey-esque levels.

The rail extension to South Morang along the original alignment of the Whittlesea line - removed 40 or more years ago and promised to be reinstated for the past 30 years - will not be completed until beyond 2013-14.

Instead of continuing the line to emerging outer suburbs including Mernda and Doreen, which have virtually no transport infrastructure, the Department of Transport has decided to opt for a busway instead of a railway.

This may be because the cost of the rail line will be approximately a dozen and a half times the cost of a similar rail line completed in recent years from Perth to Mandurah (at approximately $4.5 million a kilometre).

This is farcical stuff, adding to myki and other cost blow-outs for which, in all, we could have new rolling stock and several new rail lines to run them on.

Dennis O'Connell, Montmorency

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We need councillors who will cut rates and maintain services. And here’s how they can do it.

We need councillors who are committed to an effective pro resident differential rating system in Monash to cut the rate spiral for residents and make resident’s rates more affordable by lowering the proportion of Council’s spending paid for by local residents.

We need a differential rating system based on Capital Improved Value which reduces overall residential rates, which fairly spreads the burden and which reflects relative capacity to pay without the need to cut services.

And such a system can be implemented under existing law if councillors choose to adopt it. In fact, the system already successfully operates in other municipalities such as the City of Melbourne and the City of Greater Dandenong!

A differential rating system incorporates the fact that commercial and industrial ratepayers have a 100% tax write off for their council rates. Resident’s rates are not tax deductible.

Simply put, rates are calculated thus: Once a council determines the total amount to be raised from its rates that dollar figure is divided by the total value of rateable assessments – properties - (see below for the different types of property valuations which councils can use) to give the council rate in the dollar (usually expressed as cents in the dollar) to be charged on the assessed value of the property.

In calculating applicable rates, a council can choose to use a differential rating system under which it apportions the amount of council rates to be charged to different types of assessments (eg. residential, commercial, industrial or vacant land assessments) in a different ratio to their share of total assessment value.

For example, say residential assessments make up 80% of a municipality’s total value of assessments - in a non differential system these residential ratepayers would therefore be responsible for paying 80% of the rate income required by the council. In a differential system council might only allocate say 60% of the rate income required by the council to be paid by residential assessments even though they make up 80% of total assessment value. In this simple example the other 40% of rate income required by council would be charged to commercial and industrial properties (comprising 20% of the municipality’s total value of assessments). Thus the rate in the dollar of value charged to residential property owners is significantly reduced – they are paying a lesser proportion of council required total rate revenue.

But is differential rating fair to commercial and industrial ratepayers? Commercial and industrial ratepayers have 100% tax write off of their council rates – it’s a business cost. Residents do not have this advantage – they cannot claim their council rates on tax (unless they live and work on the same property and even then they can only claim council rates in proportion to the area of the property used for work – typically a home based business person would be hard pressed to actually claim more than 10-15% for business usage – a minor advantage and statistically insignificant for a pro differential rates policy).

Monash City Council is an example of a council that charges all ratepayers regardless of property type the same rate in the dollar and comparatively penalises residential ratepayers with higher rates than required.

Monash Council’s current Mayor & Councillors repeatedly tell ratepayers that their average rate bill of $954 is the lowest in Victoria … they even use our rate money to repeatedly advertise and publish this claim. BUT the average residential rate bill in the City of Greater Dandenong (which uses differential rating) is under $800 and they get the same or better services.

Property valuations are assessed every two years (the last as at 1 January 2008) and are set according to market values applying at the date of revaluation.

1. Site Value (SV) (that is, the undeveloped market assessment of the site – no capital additions/improvements).

2. Capital Improved Value (CIV) (that is, the total market value of the site with all capital improvements).

3. Net Annual Value (NAV) (really a subset of CIV – a notional or actual calculation of the annual lease value of the assessed property – notionally set at 5% of the CIV).

Monash City Council is one of the few councils in Victoria which use Site Value valuation. It means that rates are charged according to the assessed market value of the site regardless of buildings and other capital improvements to the land whether residential, commercial or industrial (ie. the market value of the land only).

This system is unfair. For example, two residential ratepayers, one with an older weatherboard or brick veneer home with land (site) now valued at $400,000 and house at $200,000 pays the same rates as a ratepayer with a modern $1,000,000 house on a $400,000 block of land.

The clear implication of the ratepayer with a $1,000,000 house having a greater financial capacity to pay rates than the ratepayer in the $200,000 house is ignored by the valuation system in the City of Monash. This raises real equity questions, particularly for pensioners and struggling families.

Differential Rating: A system we can use in Monash to cut residential rates and maintain services.

Melbourne City Council operates a differential rating system with business paying 17% higher rate in the dollar than residential ratepayers (4.58c residential & 5.38c business based on a Net Annual Value rating system) – but business has a full tax advantage.

In the City of Greater Dandenong the (differential) commercial rate in the dollar is 63% higher than the (differential) residential rate in the dollar and the (differential) industrial rate in the dollar is 112% higher than the (differential) residential rate in the dollar. And this hasn’t damaged business in Greater Dandenong - Industry and commerce in the City of Greater Dandenong continues to grow unhindered by the rating system.

Without necessarily copying the City of Melbourne or City of Greater Dandenong differential levels there is great scope for incoming Monash City councillors to cut resident rates without cutting services through appropriate differential rating.

It’s time to elect councillors in Monash who will work for local residents and implement a fair differential rating system.

ELECTION OF COMMITTEE OF MANAGEMENT

Save our heritage

Policy off the rails