By Nigel Billings, Senior Policy Advisor
Advocating for farmers on rates is not easy work, but every year Federated Farmers has a crack at local council plans and budgets. This can mean dozens of submissions depending on the type of budget – a ten year strategic one, or this year’s more confined annual plan. This provides real-world insights into the cost of local government to farm businesses and sometimes takes a bit off a farm rates bill.
This year painted a rather awful picture of rising rates for many farmers already under huge financial pressure. Councils argued catch up from Covid 19 measures, when many of them zeroed their rate increases for a year, but the experience seemed like a perfect storm. With a Future for Local Government review running in parallel (see page 19) and saying a lot about wellbeing, one certainly wondered whose wellbeing they were talking about.
On this basis Feds’ advocacy in 2023 focussed on keeping the mechanisms within rating systems that help balance the contribution between rural, urban, and commercial properties. Uniform general charges are important to this, along with differential rates for rural areas, and targeted rates for specific initiatives benefitting a subset of properties.
Uniform charges as a proportion of rates are unfortunately getting smaller as time ticks by, despite the furious efforts of rural submitters. It’s clear that a lot of this is driven by political considerations and what councillors think rates levels should be like in urban areas. Affordability is the reason usually given when a council winds uniform charges back: hard to swallow when the rates rise on farms as a result.
This year Waitomo District Council took a chunk off its uniform charges, with revenue from the capital value rate going up. Feds pushed back on this, knowing that the reason was increased Three Waters charges pushing up urban rates. Not much success with that one, however we did better in Christchurch looking after remoter farms, fighting off a move to reduce the uniform annual charge to a mere $50. The numbers say that result was worth around $500 a year to a farm in that jurisdiction.
Overall, farm rates certainly trended upwards this year depending on locality. Great sympathy was felt for the biggest outliers which were in horticulture, where councils are beginning to rate the value of gold kiwifruit licenses. The rates impact of carbon farming featured too, with that potential pushing up rateable values on some hill country farms by the thousands.
This year’s council budgets were also of real significance in regions that were affected by cyclone Gabrielle. Where affected councils were able to run consultations, Feds fronted up to support recovery budgets. Around New Zealand we repeatedly profiled looming problems with rural road networks.
Whangarei District Council notably put up a detailed plan for work on the roads – offering larger or smaller rate increase options but with the first 2.5% dedicated to the roading network. It was good to see council come down on the lower side of the increase, have a conversation with their community about the state of the road network, and stick to their roading pledge.
Thames Coromandel council also got an annual budget out showing some hard work going on to re-prioritise projects in the light of successive weather events, with a uniquely detailed approach to getting $2.9m out of the “nice-to-have” side of the operational budget and keeping uniform charges at positive levels.
2024 is a crunch one on rates, with councils already deliberating on Long-term Plans, with rating policy in the mix and Three Waters still a mess. Count on Federated Farmers being right there for farm businesses and rural communities.