MILDURA residents are paying higher than average rates than those living in the affluent Melbourne suburbs of Toorak and Brighton, the Victorian Ombudsman has found.
An investigation into how local councils responded to ratepayers in financial hardship found that as a whole, council hardship practices compared poorly with sectors such as energy and water and had fallen behind best practice.
The investigation, which began in August 2020 at a time of rising anxiety for many about their finances, found that regional councils sometimes charged higher rates because they had to fund the same services as metropolitan councils, but they had fewer residents to bear the cost.
A 2012 community legal centre report argued councils did not respond to hardship consistently and were “far too quick to sue residents without adequately exploring alternatives to litigation”.
Since then, the Ombudsman said it had received regular complaints from ratepayers, often after they have been contacted by council debt collectors or taken to court.
The Ombudsman’s investigation said this sometimes meant ratepayers in disadvantaged areas paid as much or more as ratepayers in wealthier areas.
It said that while Mildura Rural City Council was the state’s fifth most disadvantaged council area, its average rates in 2019-20 were $2092.95.
This was higher than average rates in Bayside ($1796.28) and Stonnington ($1443.55), home to wealthy suburbs such as Brighton and Toorak.
Of the state’s 10 most disadvantaged areas, Mildura residents paid the highest average rates, just ahead of Ararat as the state’s eighth most disadvantaged region at $2076.66 but well above the most disadvantaged region Central Goldfields Shire with average annual rates of $1419.04.
Ombudsman Deborah Glass said the Mildura Council undertook 101 court actions to recover debt in 2019-20 compared to Stonnington which had one court action in 2019-20.
Rates are determined by the council’s budget needs for the year, state “rate capping” laws and the value of the ratepayer’s property.
The median house price in Mildura is currently $350,000, compared to Toorak’s $4.95 million and Brighton’s $3.06 million.
According to research, some parts of the community are more vulnerable to financial problems including people who are unemployed or under-employed.
Research also showed higher levels of financial difficulty among single parent families, people with a disability, Aboriginal and Torres Strait Islander people and people in public housing or the private rental market.
However, the report said that having a job or owning a home did not protect people from financial worries.
It said a December 2019 survey by Roy Morgan and the ANZ Bank classed 9.5 per cent of Victorians as “struggling”.
It said most people in this group described their financial situation as “bad”, reported little or no savings, and found it a “constant struggle” to meet bills and credit payments.
A Melbourne Law School project’s research showed financial hardship could be triggered by unexpected costs or life events.
It found about half of people asked about the impact on their lives said it became more difficult to pay for basics like food and utilities.
Just more than a third reported mental health problems and just more than a quarter reported physical health problems.
More than a fifth reported trouble maintaining relationships with their family or friends.
Some financial counsellors made similar observations when they spoke with the investigation.
They said they had clients who were choosing between paying debts and buying food.
The project reported that for some people, financial hardship was a temporary setback, but for others it was a long-term problem.
The Ombudsman acknowledged that during the COVID-19 pandemic the Mildura Council put a hold on interest penalties for late rates payments, offered interest-free deferrals and payment plans and rates relief packages of up to $2000 for business rates.
