3 October 2001 PR148/01
FFNZ: Illogical to proceed with Local Government (Rating) Bill

Federated Farmers of New Zealand (Inc) President Alistair Polson says it is illogical to proceed with the Local Government (Rating) Bill before finalising the Review of the Local Government Act 1974.

Mr Polson was presenting Federated Farmers submission on the Local Government (Rating) Bill to the Local Government and Environment Select Committee today.

"The Federation is in the uncertain position of submitting to this bill without any clarity as to the future role and functions of local government, said Mr Polson. It is the Federation's recommendation that the Bill should be held over and merged with a review of the Local Government Act"

"The Federation estimates the rural rates burden on the farming community is $425 million per annum - farming contributes $1 for every $5 of total local Government rates in New Zealand. This is highly inequitable given there are 34,000 farming enterprises compared to an estimated 600,000 ratepayers in total."

"Property value rates are a blunt and overly complex funding instrument, inadequate for the purposes of a modern local authority, said Mr Polson. Property value bares limited relationship to income produced, the wealth of the owner of the use of Council service and places an inequitable burden on land intensive business such as farming."

"The provision of renew differential and target rating powers in this Bill may theoretically improve flexibility for local authorities, however we doubt the willingness of Councils to use these new powers equitably."

The Federation's submission featured examples of excessive rural rate burdens. For example a Federated Farmers member in Whakatane, will pay a total rate bill of $77,892.02 this year for his 4300 hectare property, three times more than the Whakatane Warehouse.

"Ironically, the Federation ranks Whakatane District Council in the top ten Councils for equitable rating systems"

The Federation submitted that the retention of the Uniform Annual General Charge demonstrates the provisions of the Bill do not fit with the purpose of providing local authorities with flexible powers to set, assess, and collect rates.

To assist transparency of rating systems, the Federation called for Local Government funding policies to be specified in the Bill.

"If Government is genuine in its desire to stimulate economic growth in the provinces, and ensure stable and democratic local governance, the funding of local government must undergo thorough independent review."

ENDS

For more information: Alistair Polson, PH 04 473 7269 or 025 370 085 Catherine Petrey, PH 04 473 7269 or 025 429 965

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