Farmers are frustrated and angry about how much they are paying for rates, with one making a protest by withholding payments.
South Wairarapa farmers say the system is unfair and does not deliver value for money. South Wairarapa District Council [SWDC] have said they are arranging a rating review, but the farmers say the sector is overburdened right now.
One said recent SWDC rate hikes would force some farmers off the land.
The comments come as SWDC raised rates on average by 19.8 per cent.
South Wairarapa ratepayers are also liable to pay Greater Wellington Regional Council [GWRC] rates, which have gone up 16.9 per cent.
The combined rates liability of two South Wairarapa farmers who spoke to the Times-Age is well over $100,000 for the 2024 financial year, but they say they are paying for things they either don’t get or don’t use.
Jim Hedley has a dairy and beef farm near Featherston. His rates this year have gone up to more than $58,000.
Dan Riddiford farms on a station on South Wairarapa’s south coast. Last year his rates liability was more than $45,000. While Riddiford has not yet got this year’s bill, he expects a substantial increase.
“We are being fleeced,” Hedley said.
“Farmers are not getting much for their money.”
Hedley said the rates model is skewed in favour of urban ratepayers.
“Everything is against us for the benefit of urban,” he said.
“We are not connected to the water supply. We have to supply and pay for our own water services.
“The GWRC transport rate is flawed. Busses and trains are at the back door of Wellington ratepayers. Rural ratepayers get a lot less service than urban. The farmer is paying more than an urban ratepayer in Wellington getting all the service.
“Council threw rural ratepayers under the bus to keep urban rates low.”
Hedley pointed to the SWDC split vote on rates this year, noting that “all bar three councillors voted to approve the SWDC annual plan”.
Councillors Ellims, Maynard, and Woodcock voted against adopting the annual plan and 19.8 per cent rates hike.
Riddiford is the fifth-generation owner of Te Awaiti station in South Wairarapa.
He said although he is liable for tens of thousands of dollars in rates every year, he gets almost nothing in return. He is now refusing to pay rates he insists are unfairly charged, and do not comply with current legislative requirements.
“I continue to withhold rates as a political protest to compel the SWDC to comply with the law and become efficient,” he said.
“Irresponsible council rate increases will force farming families off the land since they follow 16 per cent cost inflation imposed by central government and a 35 per cent drop in sheep returns. Recent increases in SWDC salaries and staff will be funded by rural depopulation.”
One of the major benefits for Riddiford and others in his area is roading, but locals say the roads are poorly maintained, fragile, and sometimes impassable.
Rural ratepayers do not use town water supplies, and district mayor Martin Connelly has previously pointed out they are not charged for those and other services they do not use.
Riddiford accepts much of the current situation is historic.
“I am sorry for Mayor Connelly and council for the mess they have inherited. However, that is no excuse for delay. Unless there is an immediate independent first principles rates review immediately implemented, the recent unfair increase in rural rates will at law [s101 Local Government Act 2002] remain uncollectable and unenforceable. Justice delayed is justice denied,” he said.
SWDC interim chief executive Paul Gardner has confirmed the rating review is already under way.
“The rating review commenced in September 2022, and councillors have already had several workshops on the topic,” he said.
Gardner said consultation for the review is provisionally set for September this year, to be done in conjunction with the 2024-34 Long-term Plan [LTP] process.
“The rating review commenced in September 2022 so that it could be concluded prior to the 2024-34 LTP, which needs to be adopted by 30 June 2024,” he said.
After the public consultation process, a recommendation will be put to councillors for the rating model to be adopted later this year.
Gardner expects the review to be finished before the next rates are set in 2024.
Documentation in relation to a previous review in 2018 is not available.
“A full review was not done at that time, so there are no decisions records on file. The existing rating model continued. The full review is being done this year,” Gardner said.
Hedley has conducted an almost forensic examination of the current system.
He said costs for animal control are charged to rural ratepayers, but much of the revenue raised is spent on dog control – a mostly urban problem.
“Dog control and dog attacks have an urban focus. Animal control relating to stock issues has few instances by comparison. If the money for dog control was done properly, the fees would be charged to the dog registration fee,” he said, estimating that to be about $70 extra per dog.
“They [SWDC] are waiting for the rating review. In the meantime, they are taking money off the farmers incorrectly.”
Hedley said urban footpaths and roading are other examples of an unfair burden on rural dwellers.
“The rural road reserve [funded only by rural ratepayers] is $300,000 – on top of the 70 per cent rural pay for land transport – even though the roads are a network used by both urban and rural. Rural still pay 70 per cent of urban roads,” he said.
Hedley pointed out governance costs are split 25 per cent urban and 75 per cent rural, even though the land value split is about 30 per cent urban and 70 per cent rural.
“The councillors who voted for this only wanted to keep urban rates low at the expense of rural ratepayers. They rely on the flawed rating model and also the rating review that is to take place later this year, which is too late as the damage is done,” Hedley said.
SWDC mayor Martin Connelly has previously explained rural rates in South Wairarapa were 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.
Additional rates are added depending on whether the property is urban or rural.
Connelly said earlier this year that typical rural rates are based on land value, a uniform general charge [rural], and a rural reserves and amenities component.
“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 the review will test the fairness of the current system.
“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.”
– NZLDR
Public Interest Journalism funded through NZ On Air
It’s not just rural ratepayers, in my opinion, who are treated as a piggy bank. The Council treats everyone equally; it treats everyone like a piggy bank.
It would be wonderful to read one news piece about the Council’s efforts to become more efficient and generate savings.
It’s not just rural ratepayers, in my opinion, who are treated as a piggy bank. The Council treats everyone equally; it treats everyone like a piggy bank.
It would be wonderful to read one news piece about the Council’s efforts to more efficient and generate savings.
Why are rate payers in the rural area penalized it’s so WRONG. Our properties go up in value because urban building and land values go up. Living in an urban area you get to use 99% percent of your rates. Living in the rural area you don’t get anything except driving on the rural roads like every one else. Sorry but the urban problem isn’t a rural one so stop using rural rate payers as a piggy bank and sort out the urban problem that all councils have created.
Totally out of control, urban rate payers pay for services used not rural rate payers who do not use them. Rural roads are used by everyone with a vehicle and even cyclists so why is the burden been put on the rural rate payers. The rating should be on on user pays not TARGETED rating. Can we have another vote on combining SWDC,CTC, MSTC because our 3 councils are out of control and politically motivated.
There is more to the SWDC financial situation than the current LTP and annual rate increments. The issue that more immediately needs proper examination is how the SWDC spends money, not how they gather it. Their procurement contracts, the commitment to Wellington Water, the collaboration with other Councils and the associated roading contracts require professional scrutiny. I will argue that SWDC is not getting value for money – in part because their officials seem to have a fixation with process rather than a focus on proper outcomes.