Historically, site rating in Australia was applied first to farming districts. Site rating was extended to towns and cities only after its suitability for, and acceptance by farmers had been demonstrated. Site rating was first applied to the shires of Queensland in 1887 specifically to ease the position of genuine farmers, who were finding that under the system of the time, NAV, they were paying more than their own share of municipal costs to make up for the token payments from other owners of vast, undeveloped property. The situation was the same in New South Wales, where site rating was also applied first to shires, then later to urban areas.
In Western Australia, site rating was first applied to the Road Districts, equivalent to our shires, in 1902. Only in 1948, were the 21 urban councils given optional powers to use it. Site rating has since developed to become the dominant system in Australia. Site Rating is used in approximately two-thirds of all local government councils. The councils using site value comprise more than 92 % of the municipalised area of Australia. The fact that the remaining 8 % has not changed over shows site ratingŐs appeal has been primarily to our farmers. The rural parts of Victoria which still tax buildings and farm improvements, are among the 8 %. Significantly, there is no public demand in other states to change back to what they now regard as an outdated system of taxing buildings.
The states of Queensland, New South Wales and Western Australia apply site rating universally to farming properties. In South Australia, Victoria and Tasmania, its application is not across the whole state. Historically, in comparisons of development between these two groups of states, it has been shown that farmers generally have been in a sounder position in the states that have taxed potential land value, rather than the actual development itself.
In the depression years of 1930 to 1939, total acreage being farmed in the site rated states increased by 21 %. Those not rating site value, decreased by 8 %. Similarly, in the post war years, 1947 to 1959, acreage cultivated in the site rated areas increased by 35 %. Other areas not site rated decreased by 1 %.
Two historical examples can help display what genuine farmers think of site rating. Refer Box. The term genuine farmer is important. The term farmer, is often used loosely to describe anyone who owns rural property. It is important however, to distinguish between the genuine farmer, who lives and works on the farm, and the owner who holds rural property under developed as an investment. The effects upon the two, as far as rating is concerned, is not the same. It is the interests of resident farmers, the SRD group believes, that are more important for the development of Australian agriculture.
The rural shires of Rosedale and Yea have used site rating since 1921. Reversion polls were taken in 1953 and 1959 to determine whether farmers wanted to retain site value or go back to taxing improvements using NAV. Booth results left no doubt that farmers prefer site value after experience of both systems.
Rosedale Shire 244 favor NAV, 1281 favor Site rating
Yea Shire 502 favor NAV, 1072 favor Site rating
Resident farmers benefit in lower rates under site value in the majority of cases, just as do householders in the towns, and in about the same proportions. This was found to be the case for farmers in the old Keilor shire, Eltham shire, and Frankston and Mulgrave shires. These areas are now mostly suburban of course, but changed to site rating when the shires were once regarded as rural. This principle still holds for todayŐs farming districts closest to Melbourne.
CIV hurts the efficient farmer, whose holdings are in production. It is in the interests of all Victorians to ensure farmers have every incentive to produce. Rating land value does exactly that. Genuine farmers understand this, and have always chosen site rating as their preferred rating base once given the opportunity. Genuine farmers have instantly recognised the better balance of development for rural areas site rating brings: more opportunities for their children in industry, building, transport and trade. Site rating enabled better educational facilities, and a whole host of other amenities to help stop, at least to some extent, the drift to the city.
Despite all the changes and upheaval in New Zealand over the past decade, there was one change they didnŐt make, the local government rate base. 92 % of New Zealand land, including all farming districts, use site value. All parties, both the right and the left in New Zealand have recognised the great advantage site rating brings to all sectors of the community; residents, business and farmers alike.