‘Triple whammy’ rates plan fires up Feds

Reading Time: 4 minutes A cap on council rates increases must not become an excuse to load more of the rates burden onto farmers, Federated Farmers says.

The warning comes as councils consider rating changes that could see some rural ratepayers facing massive increases – including a potential 144% hike for Carterton dairy farmers.

Federated Farmers Wairarapa president Robert Hickson says the situation unfolding in Carterton is an example of a council getting it seriously wrong.

“We’re all for greater local government cost restraint, but cuts to spending and changes to how council costs are shared must be balanced and fair.

“What we’re seeing proposed in Carterton is completely out of line. The council there is considering hitting farmers with a triple whammy of changes that would send their rates bills through the roof.”

Farmers in the district are currently on a 0.8 rates differential, meaning they pay rates on 80% of their property value compared to 100% for urban properties.

That recognises their higher property capital values and that many farmers make little or no use of council services like rubbish collection, street lighting or footpaths.

But Carterton councillors are considering wiping the concession and reducing the amount collected through uniform charges – the fairest way of spreading costs evenly across all ratepayers – from 29% to 20%.

“The third blow is the council wants to introduce a targeted roading rate, collecting much more from forestry and farming, based on the argument that heavy vehicles cause more damage to rural roads,” Hickson says.

“It’s a raid on farmers’ wallets because Carterton’s pastoral farmers’ bills will jump an average 18.4%, dairy farmers 144% and forestry properties an eye-watering 793%.”

Federated Farmers local government spokesperson Sandra Faulkner also points to Gore, where farmers are facing a potential rates hike of 28%.

She says these cases should be a warning to councils across the country.

“The rates cap shouldn’t become a game of moving the costs around until farmers end up picking up the tab.

“Councils need to find genuine savings, not simply shift the burden from one group of ratepayers to another.”

Federated Farmers local government spokesperson Sandra Faulkner says Feds will be watching councils closely as they work through their budgets and rating proposals.

The Government’s legislation for a 2-4% cap on rates increases passed its first reading in Parliament in August and will go to select committee early in the new term.

While the cap wouldn’t take full effect until 2029, councils must factor it in as they confirm their long-term plan budgets next year.

Faulkner, a former district councillor, says there’s a common misunderstanding that needs clearing up.

“When people hear rates will be capped at 4%, they assume no individual property owner’s rates bill can increase by more than 4%.

“But that’s not true because the cap is a cap on the total revenue a council collects through general rates and uniform charges.”

Because of the backlog of work on drinking water, wastewater and stormwater infrastructure, the cap doesn’t apply to those costs.

It also doesn’t apply to other charges, such as for resource consents, dog registration, swimming pool entry, and other council fees.

“We acknowledge that councils are under financial pressure from rising costs for fuel, insurance, electricity and construction supplies.

“However, we’re keeping a very close eye out for any councils talking about fee hikes or changes that sneakily put more of the cost onto rural ratepayers,” Faulkner says.

Those concerns are already playing out in Carterton, where Federated Farmers Wairarapa is pushing back on the proposed changes.

The group held a public meeting in September attended by nearly 90 farmers, who challenged figures and assumptions underpinning a consultant’s report on the proposed roading rate.

One concern raised was that freight tonnage is only an indirect proxy for pavement damage, with factors such as axle loading, distances travelled and trip frequency also important.

Hickson warned the council needs to get its numbers right before proceeding.

“Farming is a strength of our local economy and it’s short-sighted to slap a bunch of extra costs on us, especially without accurate data and analysis behind it.

“Scrapping the rural differential and reducing uniform charges is simply not a fair way to share the general rates burden.

“Those tools were put in place to offset the fact that farmers have large properties so they can raise stock.

“Farmers’ rates bills easily run into tens of thousands of dollars but they use no more council services than a family in town – in fact, often less.

“The council would be far better off focusing on growing Carterton’s economic pie, rather than making ratings changes to extract more from farmers.”

Faulkner says Feds will be watching councils closely as they work through their budgets and rating proposals.

“Farmers shouldn’t become the easy target when councils are under pressure to contain rates rises.”

Federated Farmers, New Zealand’s leading independent rural advocacy organisation, has established a news and insights partnership with AgriHQ, the country’s leading rural publisher, to give the farmers of New Zealand a more informed, united and stronger voice. Federated Farmers news and commentary appears each week in its own section of the Farmers Weekly print edition and online. Views shared does not represent that of Farmers Weekly.

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