TasFarmers Matters - Rate rise the final straw

It is fair to say that farmers are copping a hiding from all directions. Diesel has skyrocketed in price. Fertiliser has nearly tripled in cost, if it can be obtained at all. Interest rates have just risen for the third time this year. Labour costs continue to rise and add-on costs such as insurance even more. 

The Middle East war has driven many farm inputs beyond affordability. These things are essentially out of the control of government, but as usual, farmers as price takers cop the full brunt.

But wait, there’s more. Local government, the level of government designed to help communities and provide a better life is about to make life a whole lot worse for the only industry that can move Tasmania forward - agriculture. Your local government is currently working out how to make Tasmanian farmers, some of the most efficient in the world but the most under pressure by global impacts, pay significantly more for something they derive very little benefit from. 

Farms in the Brighton, Break O’Day, Burnie, Central Coast, Circular Head, Clarence, George Town, Meander Valley and Northern Midlands councils are all currently being revalued by the state government’s Valuer General. All these areas were last valued in 2019. Farmers in these areas would be acutely aware of how much property values have risen – on paper at least. Unless those councils take into consideration the very difficult circumstances farmers are in, there will undoubtedly be significant consequences.

Compounding this for some farmers, is George Town Council planning to move their method of calculating rates from a benign Capital Value method to the Annual Assessed Value (AAV) method. The underpinning principle is that the AAV is the deemed gross annual rental value of a property. For residential property, the 4% AAV benchmark has significant evidence to support that figure. However, in agriculture, the real annual rental value of farmland is 2% or under.

Should George Town Council’s policy be adopted, it will deliver a significant shift in its method of raising revenue through the levying of rates away from a Capital Value determination to an Annual Assessed Value method. TasFarmers fears that George Town Council moving to an AAV method, at the same time as land owned in the municipality is revalued by the state government’s Valuer General, will place primary producers at a significant and ongoing financial disadvantage through a huge hike in rates demands in 2026.

It is interesting to note the existing George Town Council policy acknowledges that using Capital Value as a means of determining rates will; “…reduce and smooth impact of revaluation changes.” Farmers can only draw the obvious conclusion that moving to an AAV based rating system, at the same time as property is revalued in George Town, will mean a significant increase in rates for primary producers. This will place farmers in an untenable financial position.

Council has no discretion in the minimum AAV rate – the act does not allow them to go below 4%. Council does, however, have discretion in the cent in the dollar rate, and should exercise that discretion to ensure that primary producers in the George Town municipality are no worse off than under the current rate-setting structure. This change can be mitigated by introducing a specific cent in the dollar rate which reflects the true position of primary producers.

TasFarmers has received multiple calls from primary producers in the George Town municipality concerned about these proposed rate changes. TasFarmers’ members say they cannot assess the impacts without clear cents-in-the-dollar figures, limiting meaningful feedback. 

TasFarmers urges council to provide each ratepayer with a comparison of charges under both models using 2025/26 valuations before proceeding. Failing that, it recommends amending policy to cap annual rate increases at the Hobart CPI to protect businesses from unintended financial consequences of the proposed policy change.