Quote of the day


Mr Familton said there were two possible reactions – accepting the increase as a one-off and the council “going  happily about its business”, or reducing the increase.   

 Personally, he was inclined towards the latter, he said. While the council had performed well in the past four years, it needed to be innovative.   

 “The total increase of 7.4% is a concern. It is a challenge  to those on fixed incomes and a drag on business,” he said.   

 “Let this be a warning – we need to do something about it,”  he said.   Waitaki District mayor Alex Familton responding to a projected rates increase of 7.4% .

Fed Farmers gets rates relief for Invercargill cockies


Who do you call when your rates double without warning?

Invercargill cockies called Federated Farmers and they’ve negotiated a change in the city council policy

Federated Farmers is praising Invercargill City Council for listening to farmers in order to crack a rates impasse that had soured relations between farmers and the City Council.  The changes will mean an average saving of around $3,000 per farm from 2010 compared to 2009.

“Both Doug Fraser, Federated Farmers Southland local government spokesperson, and I worked with 70 farmers and Federated Farmers staff to lobby Council to realign its rating policy,” says David Rose, Federated Farmers associate spokesperson for local government.

“The rating burden on Invercargill farmers just doubled in 2009 without any warning and I suspect this took even the City Council by surprise.

“Thanks to the hard work and facts-based lobbying of Federated Farmers, we’re able to celebrate Council officially announcing that it will take farm rates back to a more historic level.  This means the rates that farmers paid last year will roughly halve and this is great news.

“I believed that this rights last year’s wrong.  I am full of praise that the Council is honourably admitting that last year’s rating levels were wrong and it’s a big positive that we can build the relationship between the Council and Federated Farmers.

“It demonstrates the constructive role that Federated Farmers plays for New Zealand’s farmers and proves that honest dialogue achieves results.

“Federated Farmers is now working with the Invercargill City Council to review funding policy, which Council has committed to do and this prospect is exciting.  We are looking to align the rates that farmers pay with the services that they receive. 

“However, for now, we’re celebrating this success and genuinely thank Invercargill City Council for listening and understanding our concerns,” Mr Rose concluded.  

Federated Farmers’ role as an advocate for farmers and the wider rural community is an even more important one now that New Zealand is increasingly urbanised.

I hope the farmers who benefit from this decision, and others elsewhere who might need the organisation’s help one day, recognise that and support the organisation which supports us.

Rates rises raising ire


A Federated Farmers survey found that rural property rates have increased by an average of 12.5% in the last year.

The survey was self-selecting so was more likely to reflect the views of people with higher rates rises, but even so that is a very high figure when inflation was less than 3% in the same period.

A good deal of the problem is that rates are based on property values which are often unrelated to a farm’s earning capacity.

“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.

A change to a greater proportion of rates from a uniform general charge and more user-pays might help reduce rural rates but the problem is greater than who pays for what.

Initiatives by successive central governments have passed more responsibilities on to local authorities without them passing on any extra funding. That has placed a greater burden on ratepayers.

The power of general competence granted to councils has also added to costs as they’ve got involved in more activities which have to be funded, at least in part, from rates.

Then there’s the question which Fairfacts Media raised of computers in libraries competing with private enterprise.

The Oamaru Library has recently installed computers. Online research capabilities are compatible with a library but email, Skype, TradeMe,  and other web-based features will be in direct competition with internet cafes.

The amalgamation of councils in Auckland will almost certainly not be the last. Rationalisation ought to reduce some costs, but that by itself won’t address the fundamental problems caused by property-based ratings system where how much you pay is not necessarily related to what services you receive.

Feds’ election wish-list pt 3


Federated Farmers 42 page election manifesto is certainly comprehensive.

I looked at the first 16 pages a couple of posts back and pages 17 – 24 in the last post.

Page 25 continues with a list of what it wants local and central government to do:

Local government should:

* Take better account of inter-generational equity through prudent use of debt . .

* make greater use of uniform annual charges.

* Make greater use of targetted rates to ensure that there is a better link between the funding of services and a resident’s acces to an benefit from such services.

* Provide ratepayers with itemised tates assessments.

*Report financial information consistently to enable comparisons.

*Participate in performance benchmarking.

Central government should:

* Enable councils to move away from having to fully-fund depreciation.

*Provide more revenue from petrol taxes and road user charges to ensure that local roads (like state highways) are funded according to road use rather than property value.

Given how little use some country roads get this might mean very little funding for them.

* Commit funds to councils if it is imposing increased roles, responsiblities and costs on them.

* Commit one cent of the 12.5 cents of GST as a general revenue share for local government to recognise new legislation obligations.

* Remove all rating exmpetions on land, including Department of Conservation land.

* Issue a clear policy direction that central government retains all responsbilitiy for income redistribution and that this is not a role for councils.

Rates have increased far more than the rate of inflation and one of the reasons for this is the imposition of extra responsbilities by central government without any extra funding.

The policy then moves on to pest management and asks for:

* Management plan to deal with bee pests not currently in New Zealand.

* The removal of restrictions on management of Canada Geese.

* Action plan to make New Zealand TB free and reduce rabbit population.

* The continued use of 1080 poison and public information campaign spearheaded by government.

* Research into alternatives to 1080 to ensure the msot effective tool is being used.

* Remove all rating exemptions on land, including Department of Conservation land, to fully fund pest management at a regional level.

I don’t think any party is prepared to remove the rating exemptions on government land so an alternative would be central government funding for pest management in lieu of rates.

* A Regulatory Responsibility bill to be introduced and passed in the next parliament.

* An independent agency, modelled on the Toronto Red Tape Commission, to revisit all primary legislation, statutory instruments and by-laws for unnecessary compliance cost implications.

I’d add unnecessary rules and laws, especially those eneacted nationally to solve a local problem, to the last point.

* A staged uplift in science and research from 1.2% of GDP to 3% of GDP by 2029.

* A focussing of research funds into the primary sectors which underpin the New Zealand economy.

* Flexibility for Crown research Institutions to reward the best scientists commensurate with their abilities.

* A ring fencing of investment to prevent its access by social scientists and related practitioners.

 If we want to retain our place as one of the world leaders in agriculture adequately funded research is essential.

 * Full market compensation for landowners if land use is restricted under the RMA.

*  Compulsory consultation with affected landowners.

* Clear policy direction for the Department of Conservation in respect of its advocacy role.

* The streamlining of resource consents and the plan processes to minimise activities that need consents and to clamp down on vexatious submitters.

* Long-term economic viability enabled by using transferable development rights, trade offs and creative subdivision policies.

*The changing nature of landscapes acknowledged by reworking the Act’s

emphasis on the protection of amenity.

The theory behind the RMA is good but it needs an overhaul to ensure it works more fairly, effectively and less expensively.

On-farm inflation 9.7%


A 9.7% increase in costs for sheep and beef farmers in the year to March 2008 is the highest rate of on-farm inflation since 1986-87 when input prices rose 13.2%.

The previous year the price of inputs increased 2.7%.

Major increases were:

Fertiliser, lime & seeds:         30%

Fuel:                                      23.5%

Feed & grazing:                     13.7%

Interest:                                 9.0%

Electricity                               7.2%

Local Govt. rates                    6.6%

Although the high dollar reduced the price of imported goods, fertilsier, lime and seed prices still increased by 30%. The price of fertiliser increased from $260 to $480, another 60%, between March and June, June but that is not included in these figures.  

Local Government rates increased 6.6 per cent. This was the second largest increase in 17 years and in the last five years the overall increase was 33 per cent, an average of 6.6 per cent per year. The overall cumulative increase over 5 years to March 2008 was 22.7 per cent, while over 10 years the increase was 37.0 per cent.

In comparison the CPI rate of increase over 5 years was 14.0 per cent, well below the 22.7 per cent for sheep and beef farm input prices

If interest is excluded, the underlying rate of on-farm inflation in 2007-08 was up 8.3 per cent.

Meat & Wool Economic Service figures for the annual on farm inflation percentage change in the past 10 years:

including interest        (underlying % change) excluding interest

1998 -99         -2.0%                                          0.9%

1999-00                 2.8                                                             1.4

2000-01                 5.2                                                             6.0

2001-02                 1.7                                                             2.8

2002-03                 3.6                                                             3.4

2003-04                -0.2                                                             0.0

2004-05                 4.1                                                             3.7

2005-06                 4.8                                                             5.2

2006-07                 2.7                                                             2.7

2007-08                 9.7                                                             9.8


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