The Victorian Government is introducing guidelines on the use of Councils' differential rating powers.

The Minister for Local Government Jeanette Powell has released, for consultation, draft Ministerial Guidelines on the use of Differential Rates.

"There are growing community concerns regarding the use of differential rates by some Councils," Mrs Powell said.

"Unfortunately the Local Government Act 1989 provides insufficient guidance for Councils in the use of differential rates which has resulted in great complexity and inconsistency in levying rates across Victoria," Mrs Powell said.

"While some Councils charge no differential rates, others have at least ten different rating categories," Mrs Powell said.

"Several councils have employed significant creativity and stretched their differential rates powers to pursue social policy objectives."

Mrs Powell said the Coalition Government had amended the Local Government Act 1989 to give the Minister powers to set guidelines for the use of differential rates and to prevent Councils from applying differential rates that are inconsistent with those guidelines.

"The draft guidelines which have been released for public consultation, propose restoring simplicity and consistency to the use of differential rates," Mrs Powell said.

"The proposals focus a local government rating on the classifications of property, not the way an individual chooses to conduct business on their land," Mrs Powell said.

Member for Seymour Cindy McLeish joined Mrs Powell at the release of the draft guidelines, and also met with Mitchell Shire landowners who have been hit with a double blow of increased growth area property valuations and increased differential rates.

Ms McLeish said affected farmers in the growth area have seen their Council rates quadruple in a year without any change to their business operation or improvement in local services.

"There is a small minority of people in the community who are suddenly being asked, based on where they live, to shoulder a disproportionate impost to fund their Council," Ms McLeish said.

"Public consultation on the draft guidelines should help restore equity and consistency to differential rating."

A Differential Rates Ministerial Committee, comprising Chairman and Parliamentary Secretary for Local Government David Morris and Member for Western Victoria David O'Brien, has been established to undertake consultation on behalf of the Minister on these draft guidelines.

The Ministerial Committee will undertake a series of public consultation meetings across regional and metropolitan Victoria throughout February 2013 to listen to the views of Councils and the community.

Mr Morris said the feedback received on the draft at the forums, meetings with key stakeholders, and through the written submission process would be considered in the final guideline for Councils.

"The guidelines and practice notes should provide Councils with information on what they must consider when deciding whether to apply differential rates, and how differential rates will help them to meet the objectives of their community," Mr Morris said.

Anyone who wishes to provide written feedback on the draft is encouraged to do so through the Department of Planning and Community Development's website before Thursday 28 February 2013.

Mrs Powell said it was important for people to have a say on how Councils apply rates to different properties, because everyone is affected.

Guidelines will be finalised in advance of local governments' setting Council budgets and rates for the 2013-14 year.

To download a copy of the Draft Ministerial Guideline on Differential Rates and the accompanying discussion paper,  visit

Details about public forums will be published on the website, and advertised in local media.