TasFarmers Matters - Councils set to tighten screw

Tasmania's councils are about to make decisions that could have lasting consequences for the state’s farming communities. As new property valuations begin landing in letterboxes, local governments face a choice: using an increase in land values to up rates and revenue or recognise the extraordinary financial pressures facing agriculture and provide relief.

Over the past few days, TasFarmers has been hearing from members across Tasmania as the valuer general begins issuing new land valuation notices following property revaluations in six local government areas.

The increases are significant. One member in the Meander Valley municipality has seen their farm’s valuation jump from $4.2 million just six years ago to $8.8 million today, more than doubling its value on paper.

What that will mean for rates bills remains unclear, but farmers are understandably concerned that they could be facing some of the largest increases on record.

On the West Coast, we’re hearing a different but equally concerning story. While some properties haven’t yet been revalued, the council has increased the cents-in-the-dollar rate applied to annual assessed values. 

That decision, which sits within the council’s discretion, has reportedly doubled rates for some properties.

This is particularly difficult to justify in regions where residents receive limited council services. On the West Coast, many properties have no rubbish or recycling collection, and much of the local roads remains unsealed. 

Farmers are being asked to pay substantially more without seeing a corresponding increase in services.

TasFarmers has been raising concerns about the impact of council rates on agriculture for more than two years. It’s now getting to the point where the State Government will need to intervene and take action.

Councils will do what the Local Government Act allows them to do. Ultimately, it’s then up to them how they apply the rate-setting framework, and elected councillors will themselves face election in October.

The key thing is that in the past, when there have been significant upward revaluations, councils have sensibly chosen to make the appropriate adjustment to the cents-in-the-dollar rate to reflect CPI, rather than allowing a larger increase to be passed on to ratepayers. Some have taken this path, and others have simply capped the increases.

Given the difficult circumstances facing agriculture today, councils should once again be asking what relief they can provide.

Tasmania’s farmers are experiencing unprecedented financial pressure. Farm gate prices for many commodities are falling, while on the flip side input costs continue to climb, particularly fertiliser remains expensive, while fuel prices are expected to start increasing again, and along with every business cost linked with oil, including transport, and power prices are set to rise with the regulator having approved increase due to rising network costs.

The potato industry provides a clear example. At least one major processor is seeking to reduce grower prices by around four per cent, placing even more pressure on already tight farm margins.

At a time like this, local government has an opportunity to be a genuine champion for its farming communities. Farmers are the economic backbone of rural Tasmania. 

They support local businesses, create jobs, and underpin regional prosperity. Councils have the ability to moderate the impact of rates through the decisions they make, and they should use that discretion wisely.

If they don’t, the consequences will extend well beyond individual farming businesses.

When farmers are forced out of business, regional communities lose far more than agricultural production. They lose jobs. They lose families. They lose volunteers for the local fire brigade, the SES, and ambulance services. Sporting clubs lose players and sponsors.

Community halls, churches, and local events lose support. The economic and social fabric of rural Tasmania begins to unravel.

The cost of acting now is modest. 

The cost of failing to act could be felt by rural Tasmania for many years to come.