Farmers rates skyrocketing, survey says

Federated Farmers latest local government rates survey has revealed two farms paying over $100,000 in rates this year and a further six paying over $50,000.

The self selecting survey, conducted in late August, garnered 520 responses. It discovered rural property rates have increased by an average of 12.5 percent in 2009/10 - significantly higher than the current inflation rate of about 2 percent.

“The survey vigorously reinforces the Federation’s call for local government funding reform,” says Don Nicolson, Federated Farmers President.

“We undertook the survey in response to a high number of members’ complaints about hefty rates increases following significant property revaluations. Farmers have been hit particularly hard by these revaluations, as councils still rely on the archaic and fundamentally flawed property-value rating system.

“Two farms, both under Maori trusts, face $100,000 rates bills this year. Another North Island farm, also run by a Maori trust, is staring down the barrel of a 50 percent rates increase just because it farms a coastal property that could be sold or subdivided. It pays rates based on the ‘potential’ value of the land rather than its current and future economic use as a farm.

“While district council rates are the biggest component of a farm’s total rates bill, your average farmer receives very little in return. Apart from roading, the vast majority of farmers receive less benefit from council funded activities than the average ratepayer - yet we pay so much more.

“Survey respondents on average paid district rates of $9,267 in 2008/09, rising to $10,458 in 2009/10 - an increase of 13.1 percent. The median district rates bill in 2009/10 is $7,525 - up 10.4 percent from 2008/09.

“Compounding the problem is the dramatic increase in regional council rates over the past year. Survey respondents on average paid regional rates of $2,659 in 2008/09, rising to $2,938 in 2009/10 - an increase of 10.5 percent. The median district rates bill in 2009/10 is $1,875 - up 8.6 percent from 2008/09.

“While it is by no means alone, the Tasman district is a particularly big problem area, with 34 survey respondents facing average increases of 34.5 percent in 2009/10. Many respondents in the district reported valuation increases of well over 100 percent.

“These results are particularly unwelcome during the current recession. If agriculture is to lead New Zealand out of the economic doldrums, inequitable property-value rating systems must be consigned to history.

“Federated Farmers strongly supports the Minister of Local Government, the Hon Rodney Hide’s call for councils to focus on core business, while improving transparency, accountability and financial management. The Federation will continue to push for the reform of local government funding and rating systems so that farmers receive a fair deal,” Mr Nicolson concluded.

To view the full results of the survey, please click here.