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Forecasts Paint Grim Rates Picture

18 November 2003
PR 234/2003

Forecasts Paint Grim Rates Picture

A Federated Farmers of New Zealand (Inc) survey of local council rates forecasts suggests a grim future for the nation's ratepayers, said the federation's local government spokesman Don Nicolson.

The survey of forecast rates to the year ending June 2008 shows total rates growing 16.8 percent for metropolitan councils, 9.6 percent for provincial and rural councils, and 18.2 percent for regional councils. In all, the increases add a further $373 million of general and targeted rates paid by New Zealand's ratepayers.

"The growth of property value rates is a major worry for farmers. Government assured us there was no threat of rampant rates growth when the new Local Government Act was passed last year, but no evidence was given to support that claim," said Mr Nicolson.

"The farming economy needs more than vague claims about where rates are going. We have now got our own staff to fill the information gap."

Mr Nicolson said that it is important to realise that the councils' forecasts are likely to be very conservative.

Councils have a habit of underestimating future rates growth. For example, the Auckland Regional Council revenue for 2003/04 is budgeted at $104 million in this year's annual plan - but was originally forecast to be $77 million.

Waikato District, which forecast $18.5 million in its 2003/2004 Long Term Financial Strategy, actually budgeted $1.6 million over its stated forecast. Twin Cities Napier and Hastings have each also struck rates over $1 million more than forecast in their own LTFS.

"I find it remarkable that government reformed the Local Government Act blind to what landowners and local government were saying about the future burden on ratepayers, leaving the private sector to fill the gaps."

"You get the impression that this government couldn't give a hoot about ratepayers." Mr Nicolson said."

ENDS


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