VCOSS Submission to Ministerial Guidelines Relating to Payment of Rates and Charges

VCOSS Submission to Ministerial Guidelines Relating to Payment of Rates and Charges

VCOSS supports the establishment of a standard set of guidelines for local governments to use when considering hardship relief on council rates. Households need better support when they’re having trouble paying rates. Having standardised guidelines would establish consistency across the state, support council staff in making decisions, and produce fairer outcomes for ratepayers experiencing hardship.  

To this end, VCOSS commends the Victorian Government for taking this important step to strengthen support for vulnerable households.  

However, VCOSS does not support the Draft Ministerial Guidelines (‘the Guidelines’) in their current form. In our view, they would benefit from further refinement, with the support of subject matter experts from the community sector.  

We call on Local Government Victoria to undertake urgent work with community sector organisations that have deep knowledge of vulnerable households (and the requisite technical expertise) to improve the Guidelines.  

The concerns that we are seeking Local Government Victoria to address with the sector are set out over the page. 

Aspects of the Guidelines that require further refinement in consultation with the community sector  

While the policy objective is to enact positive support for vulnerable households, the draft Guidelines are, in fact, currently written in a way that is paternalistic and conveys a judgemental attitude to households that struggle to pay their rates. Further, the draft Guidelines do not present an accurate definition of hardship or a best practice approach for providing support.  

The disconnect between the policy objective and the language and construction of the Guidelines will have implications for how frontline customer service staff engage with vulnerable members of the community. VCOSS anticipates a material negative effect on these households. 

VCOSS recommends that Local Government Victoria redraft the Guidelines to better reflect the approach laid out in the Initial Views provided to the Minister for Local Government by the Essential Services Commission (ESC).¹ 

The Initial Views state that a broad definition of hardship, covering both the notions of “hardship” and “financial hardship,” is best for encompassing the wide range of unique experiences that people who need support face.² As a place to start, the Initial Views recommend the Municipal Association of Victoria’s 2013 guideline: “the simplest definition of hardship is a customer or ratepayer who wants to pay but cannot.”³ The Initial Views further state that whatever the definition is, it is the need for understanding what it means to be in hardship that is central to a best-practice approach:  

In dealing with a ratepayer in hardship, the focus should be on understanding the ratepayer’s circumstances and what support can be provided, not on determining whether the ratepayer falls into a particular definition of hardship.⁴ 

VCOSS is concerned that the Guidelines, as they are currently drafted, do not reflect this advice.  

The definition in the Guidelines is narrow and needlessly complicated by splitting hardship into two categories of “hardship” and “financial hardship.” This is unnecessary and will only work to hinder the efforts of council staff who are tasked with enacting the Guidelines. 

VCOSS strongly urges that this section is removed from any redraft of the Guidelines. What goods and services individuals choose to spend money on is not an adequate indicator of financial security, and the unique circumstances a person in hardship faces might necessitate spending on many of the goods and services listed. 

The inclusion of this section in the definition propagates the paternalistic notion that financial hardship is the result of an individual’s personal failings. In reality, financial hardship is usually a consequence of structural barriers in the Australian economy. For example, insecure work and inadequate wages, and insufficient and highly conditional social security. 

By laying out a set of spending habits that disqualifies a person from being considered in hardship, the Guidelines will obscure diverse experiences of hardship, make the job of council workers harder, and restrict the self-determination of people struggling to pay rates. 

VCOSS also warns that including such a section in the final Guidelines will open the door to invasive surveillance by local government officials looking to verify if a ratepayer conforms to the definition.  

The ESC’s Initial Views were formulated through an extensive research process involving feedback from stakeholders including social service organisations and councils, and a desktop review of approaches to hardship support across different essential services sectors. VCOSS urges Local Government Victoria to revisit the Initial Views and redraft the Guidelines to better reflect that document.  

As part of the redrafting process, Local Government Victoria should consult with key stakeholders including social service organisations and community legal centres.