Differential Rate – Bruce Every
I am appalled at the ignorance displayed by the councilors and ratepayers alike reported in the Manningham Leader with respect to the rating system in connection with the differential rates to be applied to vacant land. Differential rates are wrong because they are arbitrary and unnecessary if the correct rating base, site value (SV), is used. The currently used capital improved value (CIV) penalizes those who develop and improve their land with higher rates and assists those who hold their land idle with lower rates.The site value truly reflects the services provided by governments (roads to libraries) and private enterprise (shops to places of employment) therefore SV should be the base on which a flat uniform rate is levied. This would naturally result in higher rates being paid by vacant land and lower rates paid buy those who have houses built on their land, achieving council’s desired outcome fairly.
In the late 1950s councilors such as Morris Williams (later to become the member for Doncaster), campaigned for, and were successful with a ratepayer’s poll to change the rating system from CIV to SV which is largely responsible with the very wonderful development of Manningham in 1960s and 70s. In the 1990s with the amalgamation of councils, the State government gave councils the option of rating on CIV with differential rates or SV with a flat uniform rate. The Manningham Council in 1998 opted for CIV with differential rates (no poll or ratepayer consultation), presumably so they would have more power which they are using in this latest case.
The Council should take steps to return to the SV rating base.