How does your Council Rate?

In 1998, the average amount paid in rates by ratepayers who live in the City of Monash was a modest $662 from an average household income of $39,676.

The average ratepayer in the Shire of Yarriambiack paid $1,052 in rates from an average household income of just $24,648.

From its rate revenue, the Shire of Yarriambiack spent a whopping $319.63 per head of its population on its "local" roads.

The Monash City Council spent only $4.76 per head of the population of that city on its local roads.

These figures have been calculated from statistics obtained from the Victoria Grants Commission and the website of the Municipal Association of Victoria. The figures show that the average ratepayer of the Shire of Yarriambiack paid 50% more in rates than a ratepayer in Monash from an average household income of only 62% of that of the citizens of Monash. Monash City Council spent just 2.49% of its rates on local roads while Yarriambiack spent a massive 84.31%

These figures demonstrate a fundamental cause of rural poverty and city affluence. There is almost a direct correlation between the lowest mean household income and the highest expenditure on local roads.

The people living in the poorest municipalities pay the highest amounts for the most inferior roads.

For a nation that presumes to lecture other countries on human rights and social justice, these figures reveal a callous disregard for the rights of those who live outside the capital cities.

Why is it so?

Large rural municipalities naturally have greater lengths of road. Some have more than 20 times the length of "local" roads than some metropolitan municipalities.

This does not explain the vast differences in expenditure as the standard of construction

and maintenance of country roads is greatly inferior to that expected by metropolitan residents. The cause lies in the criteria used to define what is a "local" road. The purpose of rates is to recoup some of the cost of publicly provided facilities from the owners of properties that benefit from them.

The Country Roads Board was created to provide a highway network linking communities throughout the State. The Melbourne and Metropolitan Board of Works, largely funded by ratepayers, was responsible for metropolitan roads and bridges apart from those defined as part of the Statewide system of highways.

Over 30 years ago, a Liberal government, with the enthusiastic support of Labor, scrapped this system but it is still applied in other countries such as New Zealand and Canada. This system acknowledges that any country requires a basic network of roads and highways as part of its infrastructure

If population pressures require something more than this, the people whose properties benefit should be substantial contributors. There is no doubt that the construction of a freeway system enhances the value of properties that it services. Instead of seeking to recoup the bulk of the cost of construction and maintenance, governments in Australia go the other way and relieve those that benefit from any direct contribution.A resident of a foreign country may own a metropolitan property that gains a substantial increase in value because of freeway construction but makes no contribution to the cost of the road through property taxes. It is hardly surprising that developers want to build the world’s highest building in Melbourne. They are not required to contribute towards the cost of the infrastructure needed to service it.

On the other hand, country businesses are forced to contribute to the cost even though their metropolitan competitors benefit. A vehicle uses basically the same amount of fuel whether traveling a country road or a freeway, therefor contributing the equivalent amount in fuel taxes.

It is because of these factors that anyone building a house in the metropolitan area can expect a substantial increase in its value. In the country, it is difficult to maintain values.

With the amalgamation of municipalities, rates paid by country people may be spent on a "local" road over 200 Kms. away.

By contrast, the Commonwealth and State governments are falling over one another to finance a road that does not even exist. Greater Dandenong and Monash Cities are two municipalities that will benefit from the Scoresby bypass. Less than 5% of their rate revenue is spent on roads. Not only will property values be enhanced, they will also get noise protection without any contribution through their rates.
These Councils also collect substantial parking fees.

These municipalities are also among the main beneficiaries of a public transport system that is currently being subsidised at about $420.00 per head.

What is "Local"?

In East Gippsland Shire, ratepayers are called upon to fund "local roads" that are well over 200 kms from their properties and can have no beneficial effect whatsoever on the value of their property. In the metropolitan area, freeways that feed thousands of people daily into the central business district are funded by taxpayers.

Property owners who gain considerable benefit do not contribute through their rates.

When it comes to telephone charges, the whole of the metropolitan area is a "local" call. The justification is always "economy of scale". There is so much traffic, people have the right to local calls over the whole of the metropolitan area. When it comes to road funding, the reverse applies. There is so much traffic on the roads and they cost so much that country people have to help pay for them.

Perhaps the worst aspect is the destruction of the dignity and self respect of country people when political leaders and others tell them that their future is in their own hands. The subsidy on public transport is about $500,000 more than all the local government rates collected in the entire metropolitan area. If rural municipalities received comparable funding, there would be no problem.

Each of the political parties represented in State Parliament has held the post of Minister of Transport over the past three decades so it is pointless looking to them to correct this outrageous cross subsidisation. Country people have every reason to be angry at the treatment they are receiving from those they elect to represent them.