Eye-watering rates hikes proposed in Council Long-Term Plans
For years local authority revenue demands have run ahead of inflation. Now, with costs of managing and consulting on new freshwater regulations, plus infrastructure renewal pressures also kicking in, hold tight for rates increases to gallop away.
Consumer Price Index rises have been running at well under 2 percent since 2011 but farmers and other ratepayers have learned long ago this seems to have little or no bearing on local authority revenue demands. Even the Local Government Cost Index (LGCI), said to be a more accurate measure of the particular cost pressures facing councils, is forecast to be 2.2 percent for the current financial year.
It’s Long-Term Plan season for New Zealand’s 78 local, regional and unitary councils and Federated Farmers is well underway with its fight to rein in councillors’ spending ambitions.
For regional councils – where Local Government NZ’s estimate of $149 million worth of extra costs from central government’s freshwater policies will hit hardest - we’re seeing proposed increases in total rates for 2021/22 as high as 48 percent (Otago Regional Council), 24.5 percent (Environment Canterbury), 19.8 percent (Northland Regional Council) and 19.5 percent (Hawke’s Bay Regional Council). Excluding unitary councils like Auckland, the lowest we’ve seen is Horizons (ManawatuRangitikei) at 6.9 percent.
And this is only the beginning, with Government estimating the total costs to local authorities implementing the policies at $1.5 billion over 30 years (Net Present Value) and an annual ongoing cost of $76 million per year after 2050.
Media reports indicate Tauranga City Council, where commissioners have replaced councillors, is pondering a 22 percent hike. District councils in Waipa, Western Bay of Plenty,
New Plymouth and Southland all want 10 percent or more extra compared to the current financial year.
And these are just the headline (or ‘overall’) increases. We’ve been advocating for a fairer deal for farmers on local authority costs long enough to know to drill down into the differentials and other rates and charges mechanisms to find the true picture.
Central Otago District Council is a good case in point. Its proposed overall average increase in rates is 6.7 percent, ‘adjusted for growth’. But this masks the fact that some large farm properties are actually going to be walloped with increases of between 35-52 percent. It’s the most egregious burden shift one of our longest standing policy staff has seen in all his years with Federated Farmers.
Part of the burden shift is because councillors have decided accommodation providers, badly
hit by the Covid-19 visitor downturn, need help. Some motels will actually see rates decreases. That’s laudable but you don’t do that by slamming the one sector that has been helping the district keep afloat.
It also ignores the huge costs that will be coming to farms in the district from the freshwater rules, which will severely impact on farms’ viability (e.g. potential restrictions on irrigation in one of New Zealand’s driest areas), not to mention the added rates costs from Otago Regional Council’s massive 48 percent hike.
Federated Farmers water spokesman and Canterbury farmer Chris Allen earlier this year highlighted how the governmentdirected new freshwater regulatory environment puts a welter of new costs on councils and farmers – and it won’t just come from general rates. A basic resource consent, which initiates a Farm Environment Plan, cost him between $4500 and $5000. ECan has imposed a $200 annual charge to accept telemetry data from each of his five water consents, a requirement of water metering regulations that now apply.
He’s been sending that data to ECan for four or five years. Now he had to pay them $1000 a year to receive data he’s been sending them anyway.
• Federated Farmers members are encouraged to look into their local council’s Long-Term Plan, and take heed of Feds advisories emailed to them on how they can have their say.