Councils will be forced to implement fairer financial hardship policies for Victorian property owners under new legislation introduced in Victorian Parliament yesterday.
The Local Government Amendment (Rating Reform and Other Matters) Bill 2022, introduced by Minister for Local Government Shaun Leane, will explicitly define financial hardship and require early engagement from councils with ratepayers.
Councils will also no longer be able to use debt collectors or pursue legal action – which can result in homes being sold to pay back debts to council – unless ratepayers refuse to engage and all other options have been exhausted.
“Good hardship relief schemes strike a balance where the rate burden is shared while ensuring people in hardship are not driven further into debt or out of their homes,” Minister Leane said.
Ranges First National real estate agent Mick Dolphin said while he has not witnessed ratepayers selling up due to financial hardship, he expects the proposed law would be beneficial with the rising cost of living.
“[The issue] might be more prevalent in areas where a lot more first home buyers buy, so perhaps places like Pakenham or Officer,” Mr Dolphin said.
“I think it’s good timing to bring something like that in because I think everyone’s going to have a little bit less money in their pocket to spend on things.”
The Bill comes following the release of the Local Government Rating System Review and the Ombudsman’s ‘Investigation into how local councils respond to ratepayers in financial hardship’ report, which found that people who were struggling to pay their rates were often meet with debt collectors, high penalty interest and in some cases costly litigation.
Councils will also be limited in using Magistrate’s Court orders for recovering unpaid rates in situations where rates or charges have not been paid for two years or more.
For more information on the Local Government Rating System Review visit localgovernment.vic.gov.au.
To view the ‘Investigation into how local councils respond to ratepayers in financial hardship’ report visit ombudsman.vic.gov.au/our-impact/investigation-reports.
