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Rampant rates a sore point with farmers

Rampant rates a sore point with farmers

Farmers are questioning the priorities and fiscal discipline of New Zealand’s councils as rates takes continue to outstrip cost indexes.

Analysis by Federated Farmers shows the consumers’ price index (CPI) went up 21% between 2006-2016. Local authorities have argued the Local Authority Cost Index prepared by consultants BERL is a fairer measure of cost pressures on local government, and that went up 33% during the past decade.

Both measures are dwarfed by the average 77 percent hike in rates by our 13 city, 54 district and 11 regional councils. New Zealand’s population went up by about 12% in the same period, with consequent growth in the rating base, but Local Government NZ had no figures on how much.

"The ongoing trend of rates to rapidly out-pace inflation is greatly resented by farmers, for whom council bills can be a significant component of their farm costs," Federated Farmers local government spokesperson Katie Milne says.

The organisation has put in an enormous amount of time and effort this year working to ensure that councils’ plans for waterways and other environmental issues are practical, fair and based on science and evidence.

"But that’s matched by our submissions and lobbying on council costs, and the tendency of some councils to get carried away with growth plans and ‘extras’ with not enough recognition of the impact on the ordinary people and businesses footing the bill," Katie says.

The level of concern in the rural sector about council costs and activities could well be the reason why rural and provincial voter turnouts in the October elections were significantly higher than in metro centres. Rural voting around New Zealand was an average of 49.8%, while the metro average was 41.3%.

The highest voter turnouts in New Zealand were in districts such as the MacKenzie District (64.3%), Central Hawkes Bay (62.7%), Central Otago (62%), Gore (59.4%) and Kaikoura (57.2%).

While a number of councils have reined in spending, Katie says Federated Farmers wages an ongoing battle with councils in many districts about rates burden unfairness, such as when revaluations push up rural property values.

Land and improvement values can have little or no bearing on the property owners’ consumption of council services in relation to others. Yet some councils are reluctant to use tools such as annual charges, differentials and rates remittances to smooth out big rises in the face of factors such as farm incomes taking a severe buffeting this year.

Other councils put up the rates to fund ‘growth initiatives’ and tourism but overlook the fact that farmer businesses are also significant employers and drivers of district wealth, and it may be just as pertinent to progress to keep their rates bills down.

"Farmers are used to cutting their cloth according to prevailing conditions.

"Federated Farmers will continue to work hard to remind councils they should do the same," Katie says.


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