Reforms good, but funding is the key
"The Minister's approach of providing councils with more clarity about their purpose and requiring them to be more efficient and fiscally prudent will be music to many farmers' ears," said David Rose, Federated Farmers' local government spokesperson.
"Overall, we think the Minister's reforms are absolutely necessary and very important for lifting all councils up to the standards of the best, but there is an important missing element; reform of funding policy.
"There are fiscally prudent councils out there focused on the basics which Federated Farmers applauds.
"Other councils have greatly increased their spending, rates and debt with overall council debt increasing nearly 400 percent from $1.8 billion to $7 billion over the last decade.
"A few have got themselves into such a mess they must be at the limits of sustainability. Overall, local authority spending, rates and debt have exploded since 2002, indicating there are problems, such as the lack of clear role definition for the sector, which must be addressed.
"These increases are important for farmers because the way councils are predominantly funded, through property-value rates, place an ever increasing burden on farmers. Property values are a poor indicator of a ratepayer's income and their ability to pay, particularly across different land use types.
"The current funding policy puts a disproportionate burden on a small minority of ratepayers when the majority pays relatively little or even nothing at all. This can result in a 'tyranny of the majority' where councils find it easy to say 'yes' to dreams and schemes because they know they can safely lump the cost on the minority.
"If funding policy reforms spread the burden more equitably, the majority would be exposed to the actual costs of local government. I predict we would very quickly see the majority driving their councils to be more efficient and focused on the basics.
"As for council amalgamations, Federated Farmers welcomes the Minister's assurances these won't be forced from Wellington. Local government is local for some very good reasons. Representation of specific local interests must be balanced with seeking greater efficiencies. The Federation has taken a locally driven case-by-case approach to amalgamations, based on the specific circumstances. Our focus is supporting local farmers in this discussion.
"Overall most farmers will give Minister Smith the thumbs up for his reforms but will hope that at the very least funding reform will be in his ongoing work programme", concluded Mr. Rose.