Federated Farmers has produced the 13th edition of our annual rates report newsletter. In it we provide detail on our local policy work on rates and local government funding along with coverage of the major developments impacting council funding and financing this year and, in the years to come.
In the unprecedented times of early 2020 we certainly didn’t forget about rates. Indeed, it was as Covid-19 first roiled around the world in March that a small group of people at Federated Farmers rolled up their sleeves to do battle.
This is an annual ritual for our governance and staff; the multi thousand-dollar cost of rates on an average farmer motivates us to submit against increases and get fairer rating policies. We’re the only farming organisation that does it.
This has become an annual ritual for our staff and governance; the multi thousand-dollar cost of rates to an average farmer motivates us to submit against increases and get fairer rating policies. We’re the only farming organisation that does it.
Given the mayhem of the pandemic’s early days there were not many opportunities this year to make our case. Caught up in lockdown and uncertainty of every kind, councils tended to avoid consultation on their annual plans and budgets. To their credit many councils revised their initial budgets to achieve something like a zero per cent rate increase, while looking for ways to use their capital spend to assist local economies.
Where there were adjustments to rating policy however, we encountered some worrying trends. A steady reduction in the uniform charge component of rate revenue – increasing the load on land and capital value – seems to be one approach councils are using to ease rates pressure on residential properties and transfer it to farms and orchards.
We managed to fully defeat one of these proposals and helped take the sharper edges off a few others.
The cost of upgrading urban water and wastewater systems appears to be a big driver for this, with challenging reforms in the pipeline demanding better performance from councils. Central government announced a $761m funding package to assist councils on earlier in the year, but for many their share won’t cover the cost.
An even bigger pressure, particularly for regional councils, will arise from Government’s freshwater reforms. One estimate puts the additional costs at up to $210m for regional councils annually. Climate change is yet another area where government is asking for more from councils.
It is then not surprising that our newsletter’s annual “state of the gap” graphic shows rates growth outstripping the CPI by an ever-increasing margin.
Lastly, our newsletter features some frustrated commentary on the failure of the recent Productivity Commission inquiry into local government funding and financing to get any traction and produce meaningful change. This speaks to the disturbing picture painted overall of where rates are headed, and the big job Federated Farmers has of trying to contain it.