9 June 2022
For immediate release
Financial Counselling Victoria (FCVic) today welcomed the announcement of new legislation that will require Councils to be more consistent and community-minded when dealing with rate payer debt.
On 8 June 2022 the Victorian Government announced it was introducing the Local Government Legislation Amendment (Rating and Other Matters) Bill 2022 to Parliament. The Bill will enable the Government to limit the interest rates Councils apply to debts (currently some Councils can charge interest as high as 10%), and require Councils to adopt better quality hardship policies, which include clearer requirements to offer payment plan options, and use of debt collection agencies and court action only as a genuine last resort.
“For many years, financial counsellors have observed Councils behaving harshly and aggressively towards residents in hardship,” said Dr Sandy Ross, FCVic’s Executive Officer.
In recent years, financial counsellors have worked extensively with banks, utilities, and debt collectors to improve how they respond to people in hardship and this work has produced great improvements, but some Councils have horrific track records in their treatment of people doing it tough – much worse than many of these commercial organisations – and have refused to engage with, or consider change to, hardship policies.
“We have been advocating for some years, alongside community law centres such as WEstjustice, for improvements in Council responses to hardship. Some Councils have been great to work with, responsive to financial counsellor concerns, and treating their ratepayers with respect and compassion. However, there have been a number of Councils, across rural, regional and metro areas, that have chosen to use disreputable debt collection agencies, take away people’s houses, or bankrupt people over relatively small debts,” said Dr Ross. “There are still Councils that treat victim/survivors of family violence in hardship with bureaucratic indifference or aggression over debts that result from financial abuse, and this is completely unacceptable,” he said.
“FCVic welcomed the Ombudsman’s report last year, which exposed the need for reform to Councils. Changing the legislation is another important step in ensuring more consistent and compassionate behaviour by Councils. Decent treatment of people in hardship is fundamental to being community minded, which surely all Councils should aspire to,” said Dr Ross.
FCVic’s submission, including case studies, to the Essential Services Commission Local Government Rating System Review can be accessed here.
FCVic is the peak body for Financial Counsellors in Victoria.
Financial counsellors provide information, support and advocacy to people in financial difficulty.
Dr Sandy Ross, Executive Officer
Financial Counselling Victoria
0417 557 420 Email: [email protected]