Hume council will cease charging penalty interest on overdue rates for ratepayers who enter into a payment plan by November 30.
The move will apply to all classes of ratepayers – residential, commercial, industrial and rural – whoever commerical ratepayers will be required to provide information to substantiate that their tenant is experiencing financial hardship.
Hume’s overdue rates bill currently totals $39.5 million and council charges 10 per cent interest on unpaid rates.
Councillor Sam Misho said this approach has proven counterproductive, as reflected in a $7.5 million rise in overdue payments over the past year.
He believes the existing penalty system is more of a deterrent than an effective solution.
“[The increase in unpaid rates] exhibits the struggles of our people; otherwise, they would have paid their dues and avoided the 10 per cent interest charge,” he said.
“This 10 per cent penalty may have been intended to be a deterrent for non-payment, and is now acting as a demotivating factor, making it even harder for people to settle their debts.
“It is time for us to adopt a more compassionate and pragmatic approach. By reaching out to our ratepayers and assisting them in paying their overdue debts.”
Councillor Karen Sherry questioned how removing the penalty charge would motivate people to pay back their debts.
“We are making an assumption that it will incentivise,” she said.
“Have other councils done this? What is the tipping point? We are already reaching out to ratepayers, we are asking them to come and make an arrangement by the 30th of November and then we won’t charge you interest.
“So I am just not sure if this is the way that it’s going to happen.”
Cr Sherry also wondered if people who own multiple properties should be able to apply to the ceasing of the penalty charge.
“If someone owns an investment property and they are unable to pay their rates on it, shouldn’t they sell that property?” she said.
“If someone owns multiple properties I don’t know if I am comfortable if they are not paying their rates.”
