Victorian councils have continued the “unfair” practice of recovering unpaid rates through the courts, despite cries from the community legal sector that it contributes to financial stress and disadvantage.
Whittlesea City Council pursued 1347 default judgements for unpaid rates and local government charges between 2003/4 and 2011/12.
Data on local government unpaid rates recovery was first published by the Federation of Community Legal Centres and Footscray Community Legal Centre in December 2012.
But a new report, Like Juggling 27 Chainsaws, by the Brotherhood of St Laurence and the Consumer Action Law Centre, found recovering unpaid rates through the courts was “cause for concern” because of the potential impact on “vulnerable debtors”.
Footscray Community Legal Centre manager Denis Nelthorpe said using the default system only adds to debt and that people who don’t pay rates are in serious financial trouble.
“All suing does is add to costs and does nothing to find solutions.”
Municipal Association of Victoria (MAV) president Bill McArthur said legal proceedings were the last resort.
Mr McArthur said there was currently no standard framework for councils to recover rates, but that default judgements were very rare. He said only 0.25 per cent of rates were recovered via court proceedings in the 2010/11 financial year.
The MAV has their own Rates Hardship Group working on the best way to recover charges.
Whittlesea acting director of finance and organisation improvement Gino Mitrione said residents were given a reminder notice, a final notice and a letter of demand from a debt collector. “If payment is still outstanding, any amount over $1500 will lead to a complaint being lodged in the Magistrates Court,” he said.
