Victorian Government rates exemption disadvantaging communities
Published on 23 February 2022
Darebin City Council, Hume City Council and Moonee Valley City Council have joined forces to call out the Victorian Government’s decision to stop paying its rates bill on social housing – a decision which will ultimately slog ratepayers in municipalities where there is higher numbers of social housing.
The mayors of all three councils have also called on the Victorian Government to provide a clear commitment on where and when the $55 million windfall from exempting social housing rates will be spent.
The mayors are also urging the Victorian Government to defer the proposed changes on the social housing rates exemption until thorough engagement with affected Councils is undertaken. They have also requested that Homes Victoria explore alternative funding options for much needed public housing maintenance and upgrades.
They fear ratepayers in their three municipalities, and others like them with high social housing numbers, are funding the expansion of social housing into affluent areas of the City, with the State Government not putting its hand into its own pocket.
All three municipalities have social housing stock in poor condition and dire need of upgrade and renewal, and want to see commitments that any windfall will be directed back into areas of most need.
While welcoming the recognition that social housing has been inadequately funded, the councils have also questioned how the shortfall will impact ratepayers and the councils’ ability to deliver essential everyday services.
Research by the Municipal Association of Victoria and FinPro, the peak body for local government finance, highlights that in just 10 years, the decision would amount to an estimated $1.6 billion hit to councils, impacting the level of services and infrastructure delivered for all residents.
A new Social and Affordable Housing Contribution (SAHC) will also be introduced from July 2024, which will see the Victorian Government receive on average an additional $800 million per year.
While the councils await further detail from the Victorian Government on a clear plan for where the SAHC and social housing rates exemption expenditure will be directed to, they have called for a guarantee that a fair portion of funds will be redirected back into supporting social and affordable housing in their municipalities.
Hume City Mayor, Councillor Carly Moore said:
“It makes no sense that ratepayers in municipalities where there is social housing will pay more to subsidise social housing across Victoria.
“Hume City has one of the highest numbers of social housing in Victoria, as well as overall disadvantage – this community will unfairly bear the brunt of this decision at a cost of $2.7 million per year. This decision is simplistic cost-shifting.
“While Council welcomes the Victorian Government’s Big Housing Build program, an urgent focus must be on the upgrading and modernisation of existing social housing stock in areas such as Broadmeadows, where social housing falls well short of acceptable living standards.
“After Council’s extensive advocacy, the Minister for Planning, Richard Wynne MP acknowledged last year that there were opportunities to invest in social and affordable housing at Broadmeadows’ largest social housing estate, Banksia Gardens. We are still waiting for action on this and continue to call for an urgent commitment to be made to this site.”
Moonee Valley Mayor, Councillor Samantha Byrne said:
“Council learnt of the announcement last week and is currently looking at the impacts these changes will have on everyday essential services.”
“Moonee Valley is home to third-highest proportion of social housing dwellings in the State and we want to ensure that there is support in public housing by the State Government. Ceasing payments of rates on social housing will impact Council budget of around $2.8m per year.”
“Moonee Valley City Council is hoping the State Government find a balance so that the burden of the shortfall doesn’t rely on Moonee Valley ratepayers.”
“After an extremely difficult past two years of the pandemic, this decision will have significant impacts on many of the services and programs we offer our community, including those who live in public housing.”
Darebin Mayor, Councillor Lina Messina said:
“Darebin has a long history of support for social housing within our community, representing more than 5% of properties which is one of the highest numbers across the state. This decision will result in cost shifting of $3 million to other ratepayers, unfairly impacting our diverse community.
“A lack of social and affordable housing is a critical issue in Darebin and Victoria and we welcome the priority the Government has put on social housing. Darebin continues to do its part to support more affordable housing, including through a recent decision to lease a Council owned car park to Housing Choices Australia for a period of 50 years, through a peppercorn deal.
“Darebin echoes the concerns stated by the MAV: communities are asking councils to do more than ever in their local areas on the one hand, yet on the other hand the State Government continues to erode the financial sustainability of Council’s - this time by choosing to exempt itself of paying council rates on social housing properties.
“We now join our fellow Council colleagues in calling on the Victorian Government to provide clarity on what will be done with the $55 million windfall and how those communities most impacted and most in need will be supported the most.”
