Rural rates revolt

A prominent South Wairarapa farmer, who is one of the district’s
biggest ratepayers, has condemned the current rating structure and described at least one council as “very irresponsible”. SUE TEODORO reports.

Dan Riddiford – the fifth-generation owner of Te Waiti station in South Wairarapa – said although he is liable for tens of thousands of dollars in rates every year, he and other rural ratepayers get almost nothing in return.

In the year to the end of June 2021, Riddiford’s rates liability was $48,780, in 2022, it was $54,228, and this
year he is up for $45,439.

After the hike in 2022, Riddiford and other farmers made a joint submission to Greater Wellington Regional Council [GWRC], citing council obligations under section 101 of the Local Government Act [the LGA]. Following this, the GWRC portion of Riddiford’s rates was reduced.

He describes the news GWRC will substantially hike rates next year as “very irresponsible”.

“I read with dismay that GWRC were to increase their rates by 18 per cent, and I am nervous SWDC might increase rates by even more,” he said.

Riddiford believes SWDC and other councils are in breach of their legislative obligations to ratepayers, and the system needs to change.

His station on the south coast lacks access to facilities in town, but as a farmer with a big property, Riddiford is landed with a hefty bill.

“Councils need to be cutting costs,” Riddiford said.

“We live in times of diminishing purchasing power – do councils think the good times are going to go on forever?”

Riddiford thinks rural ratepayers are charged unfairly, and what’s required is an urgent overhaul using a benefits analysis in terms of the LGA.

“There should be regular rates reviews on a first principles basis,” he said.

“This means councils would be forced to dive into the legislation, look at the basis on which rates are charged and come up with a fair solution.

“The only benefit we get from SWDC is a pro-rata share of the roading network. The road is mostly gravel and poorly maintained.

“We do not get running water, sewerage, or stormwater management systems. We must do all of those ourselves.

“We have to specifically pay for rubbish collection if we want it, on top of the rates.”

Riddiford conceded he occasionally uses the library.

“We are one of the highest ratepayers in the district, but we get very little benefit for it,” he said.

“In a fair world, rural rates should be about 60 per cent less than town rates.”

SWDC mayor Martin Connelly said rural rates in South Wairarapa are based on land values.

“No ratepayer is charged according to the size of their land. They are charged according to the value of the land they own,” he said.

“To take a hypothetical case – if a person owned a rural property with a land value of $1,000,000 and an urban property with a land value of $1,000,000, they would pay $1,946.01 in land value rates for their urban property and $1,844.32 in land value rates for their rural property.”

Additional rates are added depending on whether the property is urban or rural.

Connelly said typical rural rates are based on land value, a uniform general charge [rural], and a rural reserves and amenities component. Urban property rates are based on land values, a uniform charge [urban], an urban amenities charge, and additional amounts for sewerage, water, and refuse.

“Rural residents do not use rubbish collection services, wastewater disposal services, and urban water supplies, and they do not get charged for them either,” Connelly said.

“Council uses rates just as central government uses taxes. Councils have few other ways of raising the money we need to supply the services residents expect.

“Just as the Inland Revenue tax system taxes people on a higher income at a higher rate to those who earn less, councils use the value of a property as a guide to people’s ability to pay.

“It is a rough and ready measure of the ability to pay, but no one has come up with a fairer system.”

Connelly said SWDC wants to have fair rates and has started a review to test whether the current system is as fair as possible.

“In May or June, we hope to start discussing rating options with a range of our residents. And those discussions will include rural and urban ratepayers as well as the full range of our ratepayers,” he said.

“For every ratepayer who is urging us to reduce their rates, there is another seeking greater council expenditure. This council aims to balance those competing interests.”