Source: Federated Farmers
Yet another local government review is underway – but will its recommendations actually be picked up, especially regarding cost fairness?
The existing system of property value rates is loaded against agriculture. Farmers pay many more times than other residents for council services and infrastructure, even though some of those services aren’t even available to rural residents, Federated Farmers local government spokesperson Sandra Faulkner says.
“Reviews have come and gone before with no real change.
“We know that councils have tools to allocate costs more equitably, such as per property charges and differentials, but councillors tend to be mindful of the voting majorities in urban areas.”
There are some pluses for rural ratepayers in the Review into the Future for Local Government draft report but also worrisome scepticism about the well-founded principle that rates are a payment for benefits, Sandra says in the Federated Farmers’ 2022 Annual Rates Report.
“The report argues that benefit is too difficult to measure and may make rates unaffordable for some if the principle were paramount in rating systems. That sounds an awful lot like a perpetuation of the present situation, where farmers pay gargantuan rates but benefit mainly from the local roading network.”
Federated Farmers applauds the recommendation that unfunded mandates – where central government legislation imposes new obligations on councils without any funding – should end. And the call for new funding mechanisms – road congestion charges, bed taxes and visitor levies, value capture using targeted rates, revenue bonds, and volumetric charging for water – is consistent with Federated Farmers’ arguments that those who benefit should pay.
The review panel wants ‘a more equitable funding system’ that delivers both vertical equity (right balance between local and national funding) and horizontal equity (where some councils will require more support than others to get a similar outcome).
“That’s fine between the tiers of government and between councils, but it’s also important that there’s equity between ratepayers,” Sandra says.
The Feds’ Rates Report covers the federation’s work arguing for targeted charges and advocating for the interests of rural families on a variety of fronts, including the massive changes looming for three waters delivery and resource management legislation.
“And at the core of our work submitting on the district plans, annual plans and long-term plans of the 78 local, regional and unitary councils is pressure on councillors to keep top of mind they are spending other peoples’ hard-earned money.
“It is a disgrace, as our rates report highlights, that in the last 10 years council rates increases have been running at an average 61%, not far short of three times the rise in the Consumers’ Price Index (24%) over the same period.”
