We all rely on the council rating system to raise enough revenue to provide goods and services to us as ratepayers. However, an efficiency dividend would be a much better system, minimising problems at the source and encouraging good behaviour.

Currently perverse incentives abound, with anyone renovating their home penalised with higher rates, whilst landowners leaving a property unused, letting it go to waste, receive a rating discount over time. Why is ‘location, location, location ‘ a crucial real estate strategy but virtually ignored in economics and our current ratings system?

We advocate that those who receive benefits from publicly funded activities should contribute according to the value these new services deliver to them. The value of these services is reflected in their land value. It is a system where the ‘beneficiary pays’ rather than ‘user pays’. Dr Ken Henry’s Australia’s Future Tax System Review advocated the need for such thinking (details below).

We provide these resources to assist with the ‘public interest’:

• Council Rating primer – understand the basics
• Council Rates – Who pays more? The family home or land speculator?
• Waste Charges
• Local Government Rates primer – an introduction to the topic

Differentials:

• Manningham Differentials
• Fire Services Levy
• Fire Levy a land subsidy

Dr Gavin Putland – 3 short letters on rating:

• Council Rates and the Capacity to Hoax
• State Bias
• Rates on Site Values Don’t Punish Home

Reports

• The Elected Representative’s Guide to Site Revenue for Public Finance (PDF 340KB) by Lev Lafayette – analysing the efficiency of Site Rating over CIV taxation.
• Aust Centre for Local Government Excellence – The Henry Review – Implications for Local Govt (PDF) p10 – 11.
• Victoria’s Municipal Rating System – AIUS Report (PDF 2.03M) – Phil Anderson’s landmark report for the Australian Institute of Urban Studies, delving into the heart of the controversial Council Rating issue. A must read.
• Fraser Coast Circumvents Site Value rating – Gavin Putland’s surgical analysis of across the board rating failures.
• Land Values Research Group historical reports – A wealth of data analysing equitable means for councils to raise revenue, with evidence going back to 1949.