Time for sensible rates reform

MALCOLM Fraser, Australia’s prime minister between 1975 and 1983 is quoted as saying, “life wasn’t meant to be easy.” 

Fraser was a farmer in the Victorian western districts before he ventured into politics and while the life of a Victorian western districts grazier was probably better than the average Tasmanian dairy farmer of the time, he would have seen his fair share of challenges from life on the land.

Fast forward to 2024 and Fraser’s words will ring ominously in Tasmanian farmers’ ears, especially as they received their rates 2024 demands and watch the nightly news with stories abounding on the manner that large supermarket chains are to be pursued by the ACCC for a range of issues.

The story published several weeks ago in Tasmanian Country on the impact of significant rate hikes for farmers certainly created many reactions – notably from farmers who were quick to relate some deep tales of woe. 

Tales of farmers being hit with rate rises equaling many thousands of dollars as a result of government revaluations and council decisions – far in excess of the increases metered out to ordinary residential rate payers. 

One farmer explained how his rates have risen nearly $10,000 over the past two years to just under $40,000 a year – and they don’t even get their rubbish collected. 

That’s a lot of prime fat lambs to sell – just to pay the rates… Farmers are quite rightly furious. 

One farmer in particular questioned the manner in which some municipalities councillors have approached these increases. 

“Either they knew of these significant rises and the impact they would have on farmers and ignored it, or didn’t know that rises of this magnitude were to occur.” 

“It is difficult to understand which is worse.”

The crux of the matter is the application of the AAV, or annual assessed value. 

All rates in Tasmania are essentially based on this formula – a fixed rate, plus a cent in the dollar calculation of AAV. For example, Devonport City has an AAV rate of 6.6055 cents in the dollar for residential, but 8.8074 cents in the dollar for all other land.

Glamorgan Spring Bay levy 4.04 cents in the dollar for residential, 4.848c for primary production. 

Yet other farming districts like Break O’ Day and Meander Valley charge less AAV for farmland than residential.

How can there be so much variation in AAV calculations in a small state like Tasmania? What is becoming increasingly clear is that this issue will not go away. 

The brutal reality of rates increases is their compounding nature – next year’s rise will be on top of this year’s rise. At some point there is a wall to be hit and some very tough decisions to be made by the Tasmanian government. 

There aren’t many industries in Tasmania that can continue to withstand these continual price rises witout suffering eventual economic failure. 

Tasmanian farming businesses see this through the continual rise in fuel, energy and energy transmission prices, fertiliser rises and wage growth, not to mention insurance costs. 

While price rises are never welcome, in some instances they are explainable, such as overseas conflict driving up urea and fuel prices. 

But what can possibly be the explanation for rate rises of this magnitude?

Despite some in local government taking umbrage at the piece published two weeks ago – not one word to date from local government on how it can be justified – how can farmers being charged significantly more than other rate payers be justified? 

TasFarmers calls on the Tasmanian Government to intervene on the issue of rate increases and the obvious disparity across the state. 

It is clear that some councils, when left to their own devices, see agriculture as an easy revenue stream, but the reality is that rivers of farming gold are a myth. It is well past time for sensible reform.