Friday, December 1, 2023

Rural rates chain pulls tighter

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The Federated Farmers rates report for the year has highlighted the continuing ability of council rates to outstrip other cost indices, with property owners experiencing a 170% increase over the past 20 years.
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That rise has left standard cost indices for dead, even when compared to typically high-rising products like alcohol and tobacco, Federated Farmers president Katie Milne said.

Those two products rose 120% over the same period, with significant tax increases on them through that period.

Food prices increased 50% over the same period while transport costs went up 30%.

Farmers are desperate for a handbrake on rates rises but concerned councils appeared to be signalling further rises are likely.

“Over reliance on property value rates is archaic, inequitable and essentially a ball and chain on local progress,” she said.

Federation rates analyst Nigel Billings was instrumental in the Feds submission to the Productivity Commission review of rating in July. 

It was a review the organisation had mixed feelings over because the commission found current funding and financing methods, largely relying on rates, measure up well.  

The Feds have, however, welcomed the report’s more targeted approach to charging specific users of council services. 

Billings said as a long-standing, regular submitter on rate issues he could not see that happening in practice.

The Feds maintain the commission did little to address one of the Feds’ greatest concerns – reconsidering rates allocation between different types of properties in districts and regions.

“It is not realistic to anticipate simply switching to a targeted rate model would do anything substantial to alter the current distribution and allocation of rates,” he said.

Billings described the solutions offered to rates burdens as patchwork and incremental, unlikely to result in reform and doing little to increase rural community confidence in councils. 

The Feds have also challenged the wider brief from central government for councils to expand their roles.

A local government focus on localism, where services are decentralised, is also identified as a further cost pressure on councils, which future rates will be required to fund.

The Feds rates report does, however, outline some wins against councils over the year. 

They ranged from a reduction in working dog registrations by 25% while in Hauraki lower rate increases came with the council using more uniform property charges rather than property value ratings, for income.

A proposed rates increase of 15% in Horowhenua for some farmers was contained to 5% following a cost blowout by the council in its general rating budget.

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