Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Dr Cullen Speaks Sense On Rates

10 November 2004 PR 209/04
Dr Cullen Speaks Sense On Rates

Farmers wholeheartedly agree with Finance Minister Michael Cullen's comments today on the need for a fairer local government rating system, said Charlie Pedersen, Vice President of Federated Farmers of New Zealand (FFNZ).

"Dr Cullen is right on the money when he says that the current system discriminates against rural areas and people on low incomes such as the elderly," Mr Pedersen said.

Dr Cullen made the comments when answering a question from the floor of FFNZ's National Council meeting in Wellington. He stressed that his views were personal rather than government policy.

"We would encourage other ministers to take heed of the Deputy Prime Minister's rightful concerns. The current system unfairly relies heavily on property values, rather than use of council services, as a way of raising revenue," Mr Pedersen said.

Federated Farmers has been calling this year on the government to appoint a Royal Commission of Inquiry into the funding of local government.

"A Royal Commission would allow a proper study, unimpeded by the vested interests of councils and valuers, of possible rating systems and other options for funding local government," Mr Pedersen said.

"Some of the alternatives used overseas include a direct sales tax, a visitor or 'hotel room' tax, and a tax on utilities such as power and gas. Another is rating only a property's curtilage -- a farm house and surrounding section -- rather than an entire farm.

"A 1988 government study floated the idea of a portion of GST funding local government, ensuring that everybody pays, not just property owners.

"These options are all worthy of independent examination if the result is a fairer system which better reflects use of services and ability to pay," Mr Pedersen said.

"The present system based on land values isn't working. It fails farmers and many other ratepayers, including pensioners living in sought-after areas and rate payers on low incomes.

"The land these people own doesn't use council services, people do, and local government should be funded accordingly," Mr Pedersen said. "Some farmers are paying tens of thousands of dollars in rates, a fact highlighted by the many members of the Federation's 10K Rates Club."

FFNZ's National Council is the Federation’s key decision makers and comprises the national board, representatives from eight industry groups, and presidents from 24 provinces throughout New Zealand. It meets twice a year.


A transcript of some of Dr Cullen's comments follows:

"The heart of the problem comes back to the base of the funding for local authorities, being rate based…it tends to discriminate both against rural areas and tends to discriminate against low income but perhaps reasonably high asset people. Particularly in urban areas, particularly the elderly, are often sitting on expensive properties but perhaps low incomes. They can't sell a quarter of the section each year to pay the rates.
"I do think that at some point we are going to have to have an intelligent debate around intelligent means of funding for local authorities which is more fairly spread.
"Look at where the government gets its money from…there is still no doubt in my mind that the total shape of government revenue is fairer than the shape of local government revenue, because you get so many inconsistencies in local government funding.
Sooner or later if Federated Farmers wants to launch that debate I would be delighted because it's more than time that we did that.
"A property in an urban area with one income earner in it pays the same amount in rates as the house next door with five income earners in it. I think that is absurd," Dr Cullen said.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Breed Laws Don’t Work: Vets On New National Dog Control Plan

It is pleasing therefore to see Louise Upston Associate Minister for Local Government calling for a comprehensive solution... However, relying on breed specific laws to manage dog aggression will not work. More>>


Corrections Corrected: Supreme Court Rules On Release Dates

Corrections has always followed the lawful rulings of the Court in its calculation of sentence release dates. On four previous occasions, the Court of Appeal had upheld Corrections’ practices in calculating pre-sentence detention. More>>


Not Waiting On Select Committee: Green Party Releases Medically-Assisted Dying Policy

“Adults with a terminal illness should have the right to choose a medically assisted death,” Green Party health spokesperson Kevin Hague said. “The Green Party does not support extending assisted dying to people who aren't terminally ill because we can’t be confident that this won't further marginalise the lives of people with disabilities." More>>


General Election Review: Changes To Electoral Act Introduced

More effective systems in polling places and earlier counting of advanced votes are on their way through proposed changes to our electoral laws, Justice Minister Amy Adams says. More>>

Gordon Campbell: On Our Posturing At The UN

In New York, Key basically took an old May 2 Washington Post article written by Barack Obama, recycled it back to the Americans, and still scored headlines here at home… We’ve had a double serving of this kind of comfort food. More>>


Treaty Settlements: Bills Delayed As NZ First Pulls Support

Ngāruahine, Te Atiawa and Taranaki are reeling today as they learnt that the third and final readings of each Iwi’s Historical Treaty Settlement Bills scheduled for this Friday, have been put in jeopardy by the actions of NZ First. More>>


Gordon Campbell: On The Damage De-Regulation Is Doing To Fisheries And Education, Plus Kate Tempest

Our faith in the benign workings of the market – and of the light-handed regulation that goes with it – has had a body count. Back in 1992, the free market friendly Health Safety and Employment Act gutted the labour inspectorate and turned forestry, mining and other workplace sites into death traps, long before the Pike River disaster. More>>

Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news