New Zealand’s 78 district, city, and regional councils have started consultations on Long Term Plans setting out proposed rates increases for the coming year and beyond.
Expect cries of pain, says Federated Farmers manager of general policy, Nick Clark.
“The high cost of council rates on farmland has always been a problem and it is a problem that seems to be forever growing.”
General rates on farms can vary greatly depending on individual councils’ funding and rating systems.
But a Feds survey two years ago showed for the 2018/19 year a typical farmer paid around $16,000 to district councils and $4,000 to regional councils.
At the high end, almost 2% of survey respondents paid more than $100,000 in rates to district and regional councils combined, and a further 8% of respondents paid between $50,000 and $100,000.
That is serious money, especially compared to urban residents who on average pay around $3,000 per year and yet get more and better services.
Over the past two decades local authority rates and payments have grown at twice the rate of general inflation and it is one of the fastest growing components of the consumer price index, growing even faster than the heavily taxed tobacco and alcohol group.
“Little wonder our survey showed 97% of farmers thought they got poor value for money from their rates. Last year, in the wake of COVID, most councils sensibly cut their rates increases, in some cases to as low as zero, to ease the pain on ratepayers. But this year there will be ‘catch-up’ with ratepayers staring down the barrel at big increases”.
“It might seem futile when farmers are a small minority of voters, but long term-plan submissions and associated advocacy are an essential part of taking care of business at Federated Farmers”, Nick says.
Federated Farmers’ survey showed that farmers are more than happy to pay their fair share, but not the often-ridiculous amounts loaded onto them by many council rating systems and certainly not to be heavily rated to pay for services they don’t receive, like urban water and wastewater, or don’t benefit from, like tourism promotion.
The fundamental problem is that rates are based on property value. This means for farmers a much higher cost than other residents or businesses for council services and amenities exacerbated by councils wanting to shift the cost of their spending off urban residents.
“Federated Farmers have a strong team of 27 policy advisors. We also have elected representatives on the ground in provinces. They all worked hard last year with some success to push councils to cut their rates increases and to stop attempts by some councils to load more of the rates burden onto farmers.
“We will continue this in 2021. It is simply good business to push back, and rest assured we will be. Based on previous years’ experience Federated Farmers will submit to at least 65 of New Zealand’s 78 councils,” Nick says.
Listen here to Nick Clark and Feds rates expert Nigel Billings talking Long Term Plans and other rates issues in FEDTalks here: