By Nigel Billings, Federated Farmers Senior Policy Advisory
With local authorities due to roll out their Long-Term financial Plans in early 2021, a hard road beckons for rural ratepayers.
This isn’t just a Covid-19 thing. Some councils, particularly in tourism centres, took big hits on their revenue in 2020 but new demands on council coffers might inspire innovative ways of garnering ratepayer cash.
For farmers it is potentially a perfect storm as councils, many already caught short on basic services, tackle additional national tasks and standards demanded of them by central government.
Already there are indications that councils are thinking hard about the package they present to ratepayers. Hamilton City’s recent proposal to quantify and ring fence central government-driven costs into a separate targeted rate – nice and visible – suggests this. And it might turn into a trend.
For district and city councils the biggest of these government-driven costs relate to reform of the three waters – drinking, stormwater and wastewater. Service and environmental standards are set to be more rigorous with the Water Services Bill before Parliament, and a new dedicated water regulator supplanting the role of the Ministry of Health.
This will put pressure on the balance sheets of small rural councils in particular, some with historic under-investment and declining populations, others struggling with growth. In the farming community the efforts of councils to shield their urban ratepayers from rising utility charges have been noticed, as general rates on all properties, including farms, are used more and more to cover deficits.
The Essential Freshwater reforms, so controversial for the farming community, will be another government driven cost likely to show up in the rates bill of every farm. Regional councils will bear the brunt of this, with estimates suggesting many millions in new expenditure on average every year.
Adding to the pile on is central government’s demands that councils be more proactive on climate change. The recent declaration of a climate change emergency adds impetus to that and may give rise to some costly programmes that go beyond the immediate needs of adaptation.
Add the overall madness of 2020 to this and it would seem some bumper rate rises are in store, remembering that for farmers a 10% increase can easily mean one to two thousand dollars cash to be found for dubious return.
Federated Farmers, as the sole and traditional advocate for farmers on local rates issues, is planning a comprehensive effort on the Long-term Plans.