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Farmers back major Local Government NZ funding review

9 April 2014

Farmers back major Local Government NZ funding review

Federated Farmers is fully behind a fundamental review by Local Government New Zealand (LGNZ) into the way local government and local roads are funded.

“LGNZ deserves praise for tackling a ticking time bomb made up of demographics and an ever narrowing funding base for council services and our local roads,” says Katie Milne, Federated Farmers Local Government spokesperson.

“This affects everyone but it is especially pronounced in our rural districts.

“Federated Farmers is very keen to participate in this review because for years, we have lobbied for alternative funding options over the antiquated narrow property value basis, we use for rating.

“LGNZ’s review is the biggest advance since the 2007 Local Government Rates Inquiry, which emerged from public unease over the rates burden.

“If we take local roads as an example, the way Road User Charges and fuel excise are being divvied out isn’t fair on local ratepayers, especially those in rural areas.

“The current road funding model does a huge disservice to rural ratepayers, who do much to generate our exports while providing the tourism backdrop. We back LGNZ in seeking to realign central government’s share of road funding since rural ratepayers are being ripped off.

“If last year you look at who is actually paying for our councils, almost 59 percent of local government income came from property rates. That is $4.611bn out of $7.88bn in revenue, so this is not small beer.

“New Zealand faces huge demographic challenges with an aging population and an equally aging infrastructure. Put bluntly, if we keep doing as we’ve always done then we are going to walk off the cliff.

“Just as farmers are investing billions to improve environmental performance, our towns and cities face large costs to meet higher water quality standards and even access to water.

“It may not be registering in Grey Lynn just yet but it is coming. Add in the costs of legislative requirements like earthquake strengthening of buildings and drinking water standards, then you are talking real pain unless new options are found.

“You also have more people living in denser urban housing and declining levels of property ownership. So the notion of property, the cornerstone of traditional rates, is changing fast.

“There has got be a better, fairer and more equitable way. By tackling road funding and a wider basis for funding local government we will find it,” Mrs Milne concluded.

ENDS

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