By Oliver Lees
An investigation into ratepayers facing financial hardship has found many councils “have fallen behind best practice”.
The Victorian Ombudsman investigation released earlier this month focused on council hardship relief policies in all 79 council areas across the state to identify whether council practices were fair and reasonable.
The Ombudsman identified the need for stronger laws, capped interest rates and improved oversight of debt collectors , as one in 10 Victorians faced some form of financial hardship.
Ombudsman Deborah Glass said many council policies were inconsistent with good administrative practice.
“When it comes to hardship, too often we’re on our own,” she said.
“The public sector is expected to act in the public interest more than the private sector – but in dealing with hardship, local councils lag behind utility and other companies, including banks.
“We would be rightly concerned if our bank was doing more to meet its social obligations than our council.”
The report stated that 96 per cent of Victorian councils have an established hardship policy for their residents. Hume council is not one of them.
Hume council does allow for residents to defer their rates or pay their rates on a payment plan, however this scheme can be affected by penalty interest that is set at 10 per cent.
The Ombudsman states: “Charging penalty interest to people in hardship is also wrong… as well as punitive and counterproductive.”
It states that under the Local Government Act 1989, councils have the power to waive rates, but many don’t publicly advertise this option.
Hume council director corporate services Daryl Whitford said the council was committed to supporting ratepayers experiencing hardship.
“Council’s support has included flexible payment arrangement options, an interest freeze on outstanding rates balances since March 1, 2020, and a $50 rates waiver for approximately 50,000 eligible residential and rural ratepayers on their primary residence,” Mr Whitford said.
“Council has assisted more than 6000 ratepayers with payment arrangements in the last 12 months alone.”
The report found an over reliance on debt collectors who cause further stress to those already under the pump.
“While councils should only be expected to waive rates rarely, discretion, not sledgehammer refusals, should be the order of the day,” Ms Glass said.
“Nobody wins from heavy-handed approaches, least of all the public interest.”
In 2019-20, Macedon Ranges council was engaged in 187 debt recovery court actions, while Hume council had just one.
Macedon Ranges council was contacted for comment.
