Tuesday, March 07, 2006

Bracks Government Destroys Rural Land Values

The "business-friendly" Bracks government's anti-development zoning changes are about to destroy hundreds of millions of dollars in land value across Victoria, with disastrous effects for local councils across the state. [See Herald Sun: Rate rise fear with land law]. Property prices for smaller rural blocks are expected to drop significantly as a result of new zoning laws which restrict development on rural blocks under 40 hectares in size - forcing councils to raise rates on other property to make up for the loss of revenue.

The rules also threaten to push out of reach the dream of many Victorians to move to the country and live on the land. The cost of going bush promises to become heart-breakingly prohibitive as homebuilders are forced to search out rarer, more expensive and harder to maintain blocks of 40 hectares or more.

The Bracks government portray themselves as encouraging Victorian businesses to be world-class [See Business Victoria: Become A World Class Performer] but it seems they are intent on keeping country Victoria out of the class.


At 7:10 PM, Anonymous Anonymous said...

Funny how the Farm Sector that was complaining about the subdivision of farms forcing up the cost of farm land and therefore preventing farms from expanding, is now complaining about the restrictions on farm land sub division is underminimg the value of farm land !

You cannot have it both ways, eihter you want to be able to subdivide land for housing, in which case land value and rates will increase in line with the lands value as a building block.

Or, you want farm land restricted to farm land, in which case its value for housing blocks, and therefore its total value will fall.

Irrespective of this, Local Government has an obligation to rate land per its inherent land use value, and to set a rate that will meet its anticipated budgeted expenditure.

Local Government will set a rate at a level it percieves to be fair to all rate payers. As it is not possible to set a rate that all rate payers will be happy with, a compromise will be attempted, and the unhappy ones will blame either the State or Local Governments instead of suggesting a better or more imaginative alternative.

Finally, I read the whinge, but fail to see you proposing an alternative.

At 3:31 PM, Blogger (post)libertarian said...


Brackswatch represents all Victorians upset with the Bracks government, not just the farming sector.

Our concern here is that by the implementation of ridiculous and onerous regulations upon rural land use, the Bracks government has reduced the value of small blocks of land in rural areas.

The "inherent land use value" you mention will fall when you are legally restricted from building a house on your 10 acre block. Even if you never would have built the house, the option to the build the house has value, value which the Bracks government just destroyed.

The complaint was not how local governments set rates. It was that because the Bracks government has reduced the value of one part of their rateable base, they will have to increase their rates across the whole base to maintain the same level of revenue. Alternatively, they will have to cut services or seek debt financing.

Here is an alternative: Why didn't the Bracks government just leave things how they were (at least things would not have got any worse) or even better, set out to create a system under which it would be easier, not harder, to build in rural areas. One million new Victorians are not going to fit into yuppie boxes in the CBD, but they could very easily be fit into rural and regional Victoria.


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