14 February 2005
PR 017/05

Rates Need Major Reform, Not Tinkering

Farmers are encouraged that city mayors want to look at new ways of raising council revenue, said Charlie Pedersen, Vice President of Federated Farmers of New Zealand (Inc).

"Farmers more than anyone know that the current system of land and capital value rates cannot be sustained.

"Local government's dependence on property value rates is particularly hard on the farming community. We've repeatedly pointed to the huge and totally inequitable contribution to local services made by farming families."

Mr Pedersen was responding to a statement by metropolitan mayors reaffirming the need for government to look at new funding tools for councils.

Federated Farmers has been calling for a meaningful and independent review of local government funding, preferably by way of a Royal Commission of Inquiry.

"It is important to note that we are not talking only about additional funding tools for councils, but total reform of the system," Mr Pedersen said.

"Local government funding was tinkered with in 2002 in the Local Government (Rating) Act. While that legislation delivered a raft of new tools for rating, they remained linked to land and its improvements.

"As a result the problem of too few paying too much for local government has worsened. Land doesn't use council services, people do.

"While boasting about modernising councils and building close relationships, government has again dropped the ball on funding. As rates look set to rise substantially yet again this year, the government must look seriously at genuine reform," Mr Pedersen said.

ENDS

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