The Ratings Practices in Local Government report conducted by the Victorian Auditor-General has been tabled in the State Parliament earlier this week.

The report found that the State’s 79 councils rely heavily on revenue generated by property-based rates and charges, with councils generating an operating value of $8.18 billion in the 2011-12 year.

The Auditor-General concluded that the common rating framework under the Local Government Act 1989 fails to provide clarity and detail in determining rates, leading to inconsistencies in the rating practices of the councils audited.

The audit concluded that there is ‘limited assurance’ that councils systematically and rigorously consider the impacts of their rating proposals on their communities. The Auditor-General found that councils ‘do not consistently calculate, and transparently report, key rates and changes in data in a way that promotes scrutiny of decisions and comparability between councils’.

The Auditor-General did not spare the State Government his ire, concluding that the Department of Planning and Community fails to provide proactive support to councils on their rating practices, or monitor and report their performance, including their compliance with the Act.

The audit of 12 councils resulted in a number of recommendations for the Department of Planning and Community Development, including:

  • clarifying and standardising key data reporting requirements;
  • updating the Rating Strategy Guide, which was last updated in 2004; and
  • reviewing the adequacy of the current Local Government Cost Index in consultation with the Municipal Association of Victoria.


State Minister for Local Government, Jeanette Powell, said that the report confirms the importance of the State Government’s decision to develop a mandatory performance reporting framework for local councils.

“To that end the Government is in the process of revising guidance on rating practices and will link these to the forthcoming mandatory performance reporting framework to achieve that outcome,” Ms Powell said.

“Local Government Victoria will release an updated Rating Strategy Guide after the Ministerial guidelines for differential rates are finalised.”

The report can be found here