Coming to terms with rising rates

I attended a meeting in Tīnui last week on the subject of Masterton District Council rates.

It was called by Councilor David Holmes, and unfortunately, only nine people turned up. Finance Manager David Paris outlined the Council’s Long Term Plan, the options and those preferred by Council.

It was a succinct presentation.

The problem for hill country farmers is a rates rise of 21.3 per cent, consisting of a 16.1 per cent increase in Masterton District Council rates and a 5.2 per cent change due to revaluation. That means the rates increase has been put at $2705 annually.

But here’s the rub. Richard Fairbrother farms at Whareama. His property will have an annual rates increase of 33 per cent. One neighbour has a 36 per cent increase, the other 38 per cent. His colleagues at Tīnui have rates increases of 36 per cent and 43 per cent. He says those increases are unsustainable in the current economic climate and I agree.

The issue is that the cost of roading is split 80 per cent rural and 20 per cent urban. I have a problem with that split. In the 20 years we’ve been living in the Whareama area, the traffic has increased hugely while the number of farms is largely unchanged.

That tells me that it is the non-rural traffic that has increased. Riversdale has grown, there’s a new camp for caravans and motor homes at Riversdale, and forestry is being harvested. Hey, all use the roads.

Why bona fide farmers should have to subsidise those users is beyond me.

It gets better. The recent rural valuations released by Land Information New Zealand has, in some cases, seen massive increases in valuations. Those valuations are worked out by considering recent rural sales.

The vast majority of rural sales in the Masterton District were for forestry which can afford to pay much more for the land than a sheep and beef farmer can. The value of those farm sales for forestry has a considerable impact on the valuations of normal food producing farms.

Iniquitously, forest land is valued less than food-producing land, so they pay lower rates, even though the end product has much greater value.

For example, using MDC figures, rural forestry pays rates of $4512 while a sheep and beef property pays $12685. The rate increase for forestry is $1500, while the farm will pay almost twice that at $2705.

I don’t have as much of a problem with forestry for trees as I do with carbon farming, which I don’t see as a long-term option but then it doesn’t have to be with the current price of carbon at $55 a tonne.

To then add the increase in rates of 19.8 per cent from the Wellington Regional Council and farmers are in a precarious position.

So precarious that sheep and beef farm profits are forecast to be down 54 per cent this year or 67 per cent from the 20/21 year.

So, farm incomes are massively down, and the rates burden considerably increased. It is an unsustainable position both for the individual farmer and Wairarapa as a whole.

When I ask local farmers what they want Masterton District Council capital expenditure to be over the next 10 years, the answer is quite simply, ‘don’t spend anything’.

Alan Emerson is a semi-retired writer, farmer and businessman living in Wairarapa. He writes a weekly column for Farmers Weekly and has written and/or edited five books.