Vacant land rates up, commercial rates down

Vacant land owners will be slugged 80 per cent more than general ratepayers in the differential rates structure adopted by Baw Baw Shire Council last week.

But, commercial and industrial ratepayers will be winners in the new rating strategy that councillors said aimed to reduce the rate burden for businesses.

Despite an attempt by some councillors to maintain the status quo of the existing rating strategy – which charges rates at a 60 per cent surcharge on vacant land – council endorsed the rates structure as proposed.

Under the new structure, vacant land owners will pay 80 per cent more than the general rate.

The differential rate for commercial and industrial ratepayers will decrease 10 per cent, from a 30 per cent surcharge to 20 per cent.

The adopted differential rating system continues to offer a 10 per cent discount to farm land and urban living land.

Higher rate differentials also are imposed on some rating categories, including a 30 per cent surcharge on residential development land.

Crs Peter Kostos and Danny Goss suggested council amend the draft rating strategy and maintain the status quo of the existing strategy with a 30 per cent surcharge for commercial properties and 60 per cent for vacant.

Cr Kostos argued it was not a property revaluation year so it made sense to provide a two per cent rate increase to all properties.

“Why should we increase vacant land and reduce commercial?” he said.

Cr Goss admitted he previously supported the proposed rate strategy but he had changed his mind.

“I consulted with a lot of people and gave this motion considerable thought.

“The principle I am sticking to in the end is people who have vacant land don’t use council services. I don’t think it’s equitable to charge them more.

“I don’t think it’s fair to charge people who don’t use the services, more for their rates,” he said.

Council defeated the motion put by Crs Kostos and Goss.

When council discussed the proposed rating strategy in April, many councillors believed the higher vacant land rate would encourage people to develop their lots rather than treat it as a land bank.

Cr Keith Cook said there were vacant shops in all towns around the shire.

He said then there were the “land sitters” who sat on their blocks of land and doubled their money for doing nothing.

“They hold the community at ransom for their own wealth,” he said.

Cr Cook said there were only two submissions opposed to the increased vacant land rate, which would be about $103 per year.

Cr Jessica O’Donnell said she knew of people who had tried to purchase land in Drouin and it was difficult.

“People are sitting on land and the prices are going up. This is the only way to address that.

“The higher rate will be an incentive for them to get on with those projects,” she said.

Cr Darren Wallace said decreasing the surcharge imposed on business would encourage small business and stimulate economic growth.

He said some people argued the rating strategy would pose a disincentive to buy vacant land. “But I disagree, they will buy it and develop it.”

Cr Michael Leaney supported reducing the commercial and industrial rate to a 20 per cent surcharge.

He said Baw Baw was not competitive at 30 per cent, saying Latrobe’s differential rate for commercial properties was 28 per cent and Cardinia’s was 22 per cent.

“If we are fair dinkum about business in Baw Baw Shire and commercial land, we need to offer this (20 per cent) incentive.

“If we want people to live here and have business here, then we need to do this.

“We need to send a strong message to business people that they are valued by this shire,” he said.

Cr Mikaela Power moved that council adopt the rating strategy as originally proposed.

She said council had to consider the overall impact to all ratepayers.

Crs Power, Wallace, Leaney, Cook and Tricia Jones supported the rating strategy as proposed with the 20 per cent and 80 per cent surcharges on commercial and vacant land respectively.

Against the motion were Crs O’Donnell, Kostos, Goss and Joe Gauci.

The rating strategy adopted by council also provides a $50 pensioner rebate in addition to the state government rebate.