Farmers fear rates rises

Call to continue spending restraint

FARMERS could be hit with unaffordable rates rises if the Dunedin City Council approves everything in its 10year plan, councillors were told yesterday.

Federated Farmers senior policy adviser David Cooper told councillors a rates increase of 7.3% in the first year of the draft plan was too high and if rates were to be increased it should be capped at 4.5%.

The council was in a position to be able to spend more money on the city, but not as much as it was proposing in the plan, Mr Cooper said.

‘‘We congratulate council on its 3% increase during the past six years and its efforts in reducing debt but we don’t think it’s time to open the barn doors yet.’’

Farmers, who already paid some of the highest rates in the city, could end up paying an extra $1000 under the proposed plan, he said.

A targeted rates system should be used to fund some of the major projects in the 10year plan, such as the proposed $60 million upgrade of the central city and $20 million upgrade of the streets in the tertiary precinct.

‘‘These upgrades, while providing some general benefit to the city overall, they do provide benefit to what I would call specific geographic areas so they should be subjected to a targeted rate.’’

If the rates rises were unable to be cut back then some of the projects should be deferred, he said.

Throughout the hearings, individual farmers also implored the regional council to lower its proposed rate hikes.

Cr Kate Wilson asked if Federated Farmers would support the council funding the major projects if they expanded Dunedin’s rate base, which would in turn lessen the rates burden on farmers.

Spending money on infrastructure could be a way to attract more business and people to the city but Cr Mike Lord asked what percentage of the cost of the projects should be covered by businesses who directly benefited from them.

It depended on the project, but a 60/40 or 70/30 split was used elsewhere in New Zealand by councils, Mr Cooper said.

‘‘It really depends on the circumstances, so you might say a bridge would provide some increased benefits to businesses in that area but it’s not going to be much, so you might look at a 60/40 split.’’

Cr David Benson Pope asked how much should be paid by the public and how much should be privately funded.

Mr Cooper said it depended on the project but for basic infrastructure generally it should be 60% general rates and the rest through some type of targeted system.