Feds asks councils to stick to basics

Federated Farmers is asking councils to stick to basics in its first manifesto for local body candidates and voters.

President Don Nicolson says:

“New Zealand’s 85 current local councils collected in rates last year, enough money to fund the New Zealand Police more than two and half times over.  For many farmers, rates are now among their biggest working expenses,”

“The vital role of councils has been underlined by the Canterbury earthquake.  Basic services are taken for granted until the likes of water, wastewater and roads are suddenly lost.

“Our local councils also control assets worth nearly $99 billion with debts of around $7.5 billion.  Every aspiring councillor needs to understand, the huge governance role they are seeking election to undertake.

“Candidates need to understand that rates are not there to fund ‘dreams and schemes’, but come from the hard work of property owners.   This is the reason why Federated Farmers believes its Manifesto is a positive contribution to the 2010 local authority campaigns.

There hasn’t been much policy from any of the candidates standing in our area and campaign statements often combine the mutually exclusive desires of lower rates and more services.

“It provides both candidates and voters a yardstick to assess policies, pledges and positions.  While there’s naturally a rural dimension to the Manifesto, the points are pretty much universal for urban and rural voters alike.

“What we want to see emerge are councillors committed to sound and equitable policies. Yet to get them, voters actually have to vote.

Nicolson said that in the last local body election on 44% of those eligible to vote did so.

” You can’t help but suspect that most of the people who ‘demand’ more be spent on local services, come from the other 56 percent who never bothered voting.

“It’s a major reason why farmers must vote in high numbers to ensure quality candidates are either elected or retained.  Yet it’s doubly important to ensure these candidates understand the concerns of farmers and have the wherewithal to do something about them.

“While the system of funding local government is badly flawed, a bold council can take positive action that will make a real difference to the amount farmers and property owners pay in rates.

“Good councillors should focus on what the core job of their council is, no mater how unsexy it seems.  It means resisting the ‘dreams and schemes’ of interest groups who are quick to spend other people’s hard earned dollars,” Mr Nicolson concluded.

A property based tax will always disadvantage farmers but there’s no simple way to reform the rating system that would be easy to sell to voters.

However, the best way to reduce the rates burden is to increase the rating base. That requires more people and more businesses.

15 Responses to Feds asks councils to stick to basics

  1. gravedodger says:

    In my experience a clear majority of those seeking local body office and those attaining the exalted position have an inbuilt desire to change the world for the better as they define better. Mr Nicholson is striking a chord here as very few have the necessary understanding of what constitutes good governance and what actually constitutes core function. Local bodies are not the place to pursue social objectives however admirable they may be as bait to trap the less informed voters.
    If all those elected to LB office stayed true to their proclaimed wish to reduce rates it would follow that we, the ratepayers, would now be enjoying an annual dividend rather than the ever increasing,(above rates of inflation) rates burden.

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  2. Federated Farmers calling for reduced rates!
    Stop the presses!
    This comes from way out in the left field!

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  3. homepaddock says:

    GD – too many people stand on a particular issue then get to council and find they’re out of their depth with or simply not interested in much of the rest of their duties and responsibilities.

    Robert – or maybe right field?

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  4. gravedodger says:

    RG you have either very little appreciation of the destructive effects of excessive taxes and or rates on creating a bigger cake for all to share or is it your innate ability to “know” what is best for all of us. I suspect both and I have an equally innate belief in giving as much freedom to citizens to make mistakes and learn from them instead of protecting us all to economic death with bureaucracy that includes taxes and rates that have only the purpose of massaging a supportive vote.
    I guess it is actions having unintended, or in too many cases intended, consequences.
    A timely post Ele, on good sense from the Fed Leader.

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  5. Red Rosa says:

    Dairy farmers in particular are staggering under the burden of local body rates. Dairy NZ has all the data.

    In the 07/08 year the average NZ dairy farm paid almost $10k annually in rates. That was a huge 2.2% of $450k annual operating expenses; and a massive 1.1% of the $900k gross farm income.

    Faced with these alarming figures, Feds wants a poll tax: a great idea. The poll tax has brought down every government in the UK to try it, from the Peasants Revolt in 1380 to Margaret Thatcher 600 years later.

    This is a Feds hardy annual, badly in need of pruning.

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  6. gravedodger says:

    Outstanding analysis Red Rosa, now some figures based on a store stock property depending on wool and unfinished stock and suffering from the high values attributed to high asthetic values not all of which have been addressed.

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  7. Red Rosa says:

    If you can navigate your way around the Meat & Wool website, you might be able to track those figures down for yourself, GD! It beat me. But talk to them nicely and they may send you a hard copy.

    The disturbing thing about the sheep and beef guys is that their rates generally don’t pay anything like the real costs of roading to their properties.

    But regularly Feds sound off on ‘user pays’. If this was applied to roading, then rates for many of their members would go through the roof – except for the few on the state highways.

    If you don’t believe me, have a yarn to the roading engineer on your local authority. And a quick glance at the accounts for any NZ rural district council will show that roading is by far the largest single item.

    The outlying farms, often on difficult terrain with bridges etc to maintain, are actually subsidized heavily by urban ratepayers – even in largely rural district councils.

    Now most of us are happy enough with this. In my view, the back country farmers need all the help they can get.

    But a certain honesty and humility from Feds on this issue would be a welcome change.

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  8. homepaddock says:

    GD – I don’t have the figures but am sure it would show that the asset value has got way out of kilter with the return from it.

    Rosa, yes roads do take a large proportion of rates although it’s not only landowners who use them.

    However, the main point Nicolson is making is the need for good governance.

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  9. Red Rosa says:

    If Feds were serious about getting rates down, they would be calling for an immediate amalgamation program among the 70-odd NZ Territorial Authorities.

    This would drastically cut overheads and slim down staffing. Senior people at present under-employed in tiny TAs can readily take on bigger responsibilities.

    Consider this – when the Auckland SuperCity is settled, 1.5m NZ’ers will live in one TA and the other 2.5m in 70!

    Four TAs for the South Island is perfectly feasible. In order of size – Canterbury, Otago/Southland, Nelson/Marlborough, and the West Coast.

    Even then, at 40k population the West Coast would be too small, at about the present size of Waimakariri or Ashburton. Currently, it has three District Councils and a Regional Council!

    Try this one on your local Feds rep. But I won’t be holding my breath.

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  10. Sally McIntyre says:

    Red Rosa, have you actually studied in depth the funding policy of a council?

    Take the Gore DC with a rating base of 5,900. The urban ratepayer does not contribute a cent to rural roads and bridges and rural folk do not pay for urban roads. Rates collected in the rural area are spread over fewer rating units. Our farm pays around $3000 and our house in Gore pays $200 for roads that are all tar sealed unlike the rural roads.

    A rural ratepayer contributes the same amount as the urban for democracy, arts & heritage, information centre, cemeteries and civic buildings on the UAGC charge, which is set at the maximum rate allowed by law of 30% of total rates collected.

    Unfortunately for Gore rural folk with higher capital value properties the charges are really socked into them for 2 libraries and 2 swimming pools – a huge complex in Gore and a smaller pool in Mataura within a 12km radius. Our farm nearly 40kms away pays 250% $400 more than what our residential home does for these facilities.

    When it comes to Parks and Reserves that are on a fixed charge a rural ratepayer pays nearly 30% more than what a Gore residential property does.

    Of total GDC rates collected
    11% goes towards democracy and civic buildings.
    16% – P&R & cemeteries,
    14% – libraries & pools,
    10% – A & H, grants & info centre.
    21% -Essential Services
    17% – roads,
    11% – toilets, CD, rural fire, district plan.

    The residential folk are also heavily subsidised by the commercial ratepayer.

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  11. Sally McIntyre says:

    I should also have mentioned that our water fixed charge rate on the farm is $1830 plus a metered charge for water used. The urban charge is $212.

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  12. Sally McIntyre says:

    It is a disgrace that the elected members and in general the ratepayers, do not hold Councils to account for their wasteful and profligate expenditure and overloaded payrolls. As long as we have councillors sitting on the fence, ignoring the call for their Chief Executives to provide cost effective value for money performance monitored services, our rates will continue to outstrip inflation.

    In this election do we hear candidates expressing their concerns at the runaway costs Councils have forced onto ratepayers?

    When will councillors wakeup to the fact that Council rates are set to equate with Council costs and there is something they can do to stop the rotten rort taking place under our very eyes?

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  13. Red Rosa says:

    SM – I’ll point out to Feds sometime to be careful what they ask for. Gore District Council seem to have delivered it!

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  14. gravedodger says:

    Red Rosa I am in full agreement with your suggestion of unitary authority as a step to better management and accountability so long as representation is on the smallest wards deemed necessary with a FFP system of voting and a recall system by way of petition if say 30% of the wards registered voters call for it to be resolved by way of a by-election. Four for the SI may be something to discuss but a good starting point

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  15. Sally McIntyre says:

    Red Rosa
    Your reply to my comments are a bit confusing. Could you be more specific.

    Re amalgamations I think you would be surprised at how positively FF would react to this.

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