Constant rate increases irk

He was answering Federated Farmers’ questioning of the priorities and fiscal discipline of New Zealand’s councils, as rates continue to outstrip cost indexes. Alexander says it is pleasing to see others parties like Federated Farmers and the tourism industry are picking up on the need for more flexible funding tools for rates. This is an issue which no longer can be ignored, he says. The Feds say between 2006 and 2016 there has been 77% hike in rates by the country’s 13 city, 54 district and 11 regional councils. The New Zealand’s population went up by about 12% during the same period, with the consequent growth in the rating base – but LGNZ has no figures on how much, the Feds say. Analysis by Federated Farmers shows the consumers’ price index (CPI) went up 21% in the same period. Local authorities have argued the Local Authority Cost Index prepared by consultants BERL is a fairer measure of cost pressures on local government and that went up 33% during the past decade. However, Alexander says councils are faced with a range of complex cost drivers which a simplistic comparison to either the consumer price index or the local government cost index fail to fully take into account. “Neither index is able to estimate the costs of new and emerging challenges and demands facing councils,” he told Rural News. “These include the upfront costs of building infrastructure for future generations as a result of the rapid population growth experienced in a number of areas, the cost of meeting new national standards imposed on councils by central government, such as those concerned with water quality and earthquake strengthening, and the demand for higher service levels from the public, such as putting in services to manage the growth of freedom camping. Alexander says while property rates will continue to be the cornerstone of local government funding for the foreseeable future, LGNZ has been advocating for more flexible funding tools to meet current and future challenges. “It is pleasing to see other parties like the tourism industry and Federated Farmers are picking this up as an issue that can no longer be ignored.” Feds local government spokesperson Katie Milne says the ongoing trend of rates rising to rapidly out-pace inflation is greatly resented by farmers, for whom council bills can be a significant component of their farm costs. Some councils get carried away with growth plans and ‘extras’ with not enough recognition of the impact on the ordinary people and businesses footing the bill, Milne says. “Land and improvement values can have little or no bearing on the property owners’ consumption of council services in relation to others. Yet some councils are reluctant to use tools such as annual charges, differentials and rates remittances to smooth out big rises in the face of factors such as farm incomes taking a severe buffeting this year. “Other councils put up the rates to fund ‘growth initiatives’ and tourism but overlook the fact that farmer businesses are also significant employers and drivers of district wealth, and it may be just as pertinent to progress to keep their rates bills down.”