Farmers resist rates hikes
Horizons region farmers in survival mode and facing massive income drops have come to town to urge the regional council to rein in spending and relieve their rates burden.
Federated Farmers’ Manawatū/Rangitīkei president Ian Strahan said while Horizons was proposing an average rates rise of 12.9%, rural properties were being stung with increases of 20%, 30% and even 40%. This is daylight robbery, and the council needs to stop this from happening.
“We urge the council to sharpen its pencils and cut expenditure.”
Strahan said farmers were expecting a sharp decrease in farm profitability in the next year or two.
Sheep and beef farmers were looking at a 17-year low in incomes, and dairy farmers were also struggling.
Many were grappling with a range of rising costs, with farm inflation outstripping the general inflation rate, and also faced increasing regulatory costs and high interest rates.
But they were caught with high property valuations, partly driven by demand for land for forestry, and those valuations were a very poor proxy for their ability to pay rates.
Undermining their ability to make productive use of the land would harm the regional economy.
“Unless we protect highly productive land, or evolve to eat pine trees, then reducing our ability to farm food will create severe economic dependency on imported food, as well as contribute to hardship as our agricultural economic activity shrinks.”
Strahan said the council was shifting more of the rates burden on to farmers by decreasing the amount it was demanding through uniform annual general charges, which meant a greater proportion had to be collected through general rates.
Federated Farmers wanted the council to use uniform annual charges to their maximum.
The shift was effectively relieving rates hikes for householders at the expense of the rural community.
“Pauperising farming ratepayers in exchange for easing of other ratepayers’ pain is not a realistic solution to pressures of increasing council expenditure.”
Other farmers made individual submissions citing similar rates hikes.
Kairanga farmer Richard Green said his two productive properties were facing rates hikes of more than 30%, a total increase of more than $7000 in a year.
He said there was a perception that farms had high capital values, which had been inflated by the demand for forestry land, but those values were not related to cash flow.
Farmers were borrowing to stay afloat, and if the council persevered with its rates increases, that would undermine the economic productivity of the region.
Karere Rd farmer Peter Wells said his rural rates would increase by 30%, which was totally unacceptable.
He said the council was proposing major changes to the rating system that would shift costs from householders on to landowners.
Wells said it did not have the social mandate to make that change, and had not properly consulted people and demonstrated the evidence it had to justify the shift.
Rangitīkei farmer Tim Matthews said rates on two properties were going up by 42% and 33%.
He said Horizons’ plan seemed to have been written by those oblivious to the financial environment.
He described reductions in the uniform annual general charge as “silly”, and defying logic.
Matthews said the increases were unaffordable, and the whole rating system needed reform.