Julia Gillard, as part of her agreement with Andrew Wilkie and the Greens, has promised to hold a referendum to provide constitutional recognition for local government.

Yet as the Prime Minister helped launch John Brumby’s re-election campaign in Bendigo today, a fascinating tussle over council taxing powers is playing out in the countdown to the November 27 Victorian election.

With no mention in the federal constitution, Victorian councils are entirely a creation of the state Government. They can be sacked at a whim and most of their powers are derived through the Local Government Act.

At the moment, the law allows Victorian councils to impose differential rates on various classes of ratepayer, with the maximum being 4 times higher than the lowest rate levied.

Moreland City Council, in Melbourne’s inner north, levies the maximum 400% rate on empty overgrown blocks but blazed the trail on pokies operators by imposing a 200% differential rate.

When Moreland first attempted to go down this path last year, ALH, the pokies joint venture between Woolworths and billionaire Bruce Mathieson, launched a Supreme Court challenge.

Woolies had a win of sorts but then Moreland went back and reworked its gaming policy and imposed the 200% rate anyway, which will double the $115,000 paid in 2009-10 to raise $230,000 in 2010-11.

All 11 pokies venues in Moreland, including five controlled by Woolies, have now paid the first instalment of this super tax but an eerie silence has descended over the council. Why hasn’t Woolies gone back to the Supreme Court?

News Ltd’s local Moreland Leader yesterday splashed with the story under the headline “Deal or no deal” amid fears a secret deal has been done between Woolies, the Government and the Opposition to legislate away powers for councils to impose differential rates.

Moreland CEO Peter Brown told councillors last Tuesday he’d heard informally that Woolies had decided against launching another Supreme Court challenge and was instead dealing direct with Spring Street urging them to change the law.

The pokies industry has donated more than $1 million to the Victorian ALP during its time in office and as was noted in this Crikey story last February, Woolies has been getting all sorts of planning favours out of John Brumby.

With planning — especially the state government shafting councils by calling in major applications — emerging as the biggest hot-button issue in those key inner-city electorates, Brumby has an important decision to make.

Does he allow Moreland’s 400% super-rates model on pokies venues to sweep across all 79 councils and pour more than $10 million a year extra into local government coffers or does he cut councils off at the knees?

So far, the Government has been attempting to sweat this one out as gaming minister Tony Robinson attempts to hang onto his ultra-marginal seat of Mitcham.

Robinson has been virtually invisible for the campaign and is yet to commit to appear at the one and only pokies industry policy debate scheduled for next Tuesday as is explained in this promotional video featuring everyone from Tim Costello to No Pokies senator Nick Xenophon.

Meanwhile, the Victorian Local Government Association yesterday launched its pokies manifesto at Moreland City Council with the complete support from Moreland’s Labor mayor Stella Kariofyllidis.

Further north of Moreland, the City of Whittlesea is a 100% Labor-controlled council but one of its senior officers, Felicity Leahy, gave this cracking speech slamming Labor’s pokies policy at the VLGA launch in Moreland.

With Labor now revealed to have jumped into bed with the p-rn industry through S-x Party preference deals and the gun lobby through Country Alliance preference deals, it remains to be seen if a special deal has also been struck with the pokies industry.

Journalists have been promised an answer by this afternoon. Watch this space.

*Disclosure: Stephen Mayne is standing as an independent “no pokies” candidate in the Northern Metropolitan upper house region, which includes parts of Moreland. He will also be flying to Brisbane on Thursday for the Woolworths AGM where he is a candidate for the board running on a no-pokies platform that was heavily censored in the notice of meeting.

Peter Fray

Save up to 50% on a year of Crikey.

This extraordinary year is almost at an end. But we know that time waits for no one, and we won’t either. This is the time to get on board with Crikey.

For a limited time only, choose what you pay for a year of Crikey.

Save up to 50% or dig deeper so we can dig deeper.

See you in 2021.

Peter Fray
Editor-in-chief of Crikey

SAVE 50%