Federated Farmers is concerned local government review recommendations regarding cost fairness for rates will not be adopted, leaving Wairarapa farmers out of pocket.
Federated Farmers local government spokesperson Sandra Faulkner said the existing system for property value rates was “loaded against agriculture”.
“Farmers pay many more times than other residents for council services and infrastructure, even though some of those services aren’t even available to rural residents.”
She said previous reviews had come and gone before with no real change.
The Review into the Future for Local Government draft report said the current funding system was not sufficient for the current and future conditions.
“The Productivity Commission’s 2019 report on local government funding and financing identified a range of drivers that will have an impact on the local government funding system, including population growth and decline in particular areas, for example, due to people moving for employment and decreasing rural population.”
Faulkner said Federated Farmers believed councils had tools to allocate costs more equitably, such as per property charges and differentials, but councillors tended to be mindful of the voting majorities in urban areas.
She said there were some positives for rural ratepayers in the Review into the Future for Local Government draft report but also “worrisome scepticism” about the well-founded principle that rates were payment for benefits.
“The report argues that benefit is too difficult to measure and may make rates unaffordable for some if the principle were paramount in rating systems.
“That sounds an awful lot like a perpetuation of the present situation, where farmers pay gargantuan rates but benefit mainly from the local roading network.”
Federated Farmers applauded Greater Wellington Regional Council in its 2022 rates report after a funding review that began in late 2021.
“Changes to various rates, including pest and flood management, reflect the principle that benefits accrue more widely than just farmers.
“The changes will result in annual savings in the thousands for many in the farming community.”
Federated Farmers said it was able to “extract a commitment” from GWRC to evaluate the merits of introducing a uniform annual general charge component to the general rate.
GWRC said on its website that local councils collected rates on its behalf.
The regional council had two kinds of rates, the general rate that covered activities such as land, biodiversity, and resource management; and targeted rates that funded Water Wairarapa, catchment schemes, drainage schemes, and maintaining flood protection and control works.
“While we set and assess regional council rates, your local council will invoice and collect our rates.”
GWRC chief finance officer Alison Trustrum-Rainey said during the Revenue and Financing Policy review, several stakeholders, including Federated Farmers, requested the council consider the use of a Uniform Annual General Charge [UAGC].
“We currently do not utilise this funding method to collect revenue.”
She said the council agreed to do an analysis of the UAGC and the impacts on its ratepayers.
Trustrum-Rainey said the analysis was currently underway.
“The objective of this analysis is not to change the Revenue and Financing Policy, but to provide Councillors with a more in-depth understanding of this funding method so that when they review the Revenue and Financing Policy next, usually done at the same time as the long-term plan [renewed every three years], they will be more informed in the decision making process.”
She said the UAGC was similar to a fixed charge.
“It would see every ratepayer paying the same charge regardless of location or value of their property.”
Trustrum-Rainey said the general rate was currently used, and the council distributed the charge based on capital value.
“The analysis of the UAGC will explore options for using the UAGC to varying levels, as legislation allows us to use the UAGC to collect up to 30 per cent of our revenue using this funding method.”
She said her team planned to discuss the analysis with councillors in February or March next year.
“There are no decisions to be made [now].”
Faulkner said Federated Farmers applauded the recommendation in the Review into the Future for Local Government draft report that unfunded mandates where central government legislation imposed new obligations on councils without any funding should end.
Associate Minister for Local Government and Wairarapa MP Kieran McAnulty was contacted for comment.
