If You are a Farmer, Why Have Your Rates Shot up?

If you are running a farm – a conventional large farm – you have probably discovered a considerable jump in your rates.

The reason for this is that the Council has dramatically reduced the Uniform Annual General Charge (UAGC).  The result of this action has been to shift the rates burden away from low-land-value properties in the District to those with higher land values.

Part of the reason for this was to lessen the rates burden on small low-value urban properties, which were, in my view, paying disproportionately.

The problem is, however, the Council has not got the mix right.  It needed to reduce the UAGC, sure, but it also needed to move the rating to capital value rating.  This would have had a similar effect to lowering the UAGC, but instead of shifting the rating impact from low-value urban properties to high value rural properties, would have shifted the impact to high value residential properties and to high capital-value rural properties, mainly lifestyle blocks and the new dairy units.

In other words, the Council has got the rating mix wrong.

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2 Responses to “If You are a Farmer, Why Have Your Rates Shot up?”

  1. Geoff Swailes Says:

    Geoff Swailes Says:

    August 8, 2009 at 11:04 pm | Reply edit

    Another reply to your Aug09 blog. RATES FUNDING.
    I was disappointed to see you are still plugging the line that rates are best funded from property values. This line was first started by king Henry VIII, 450 years ago, surely we can use 21st century means to achieve an equitable funding formula.
    Whatever basis of property we use to calculate rates , it will always be unjust to somebody. Reason, it is not property that benefits from rates revenue,it is people. Therefore we should be rating people not property.
    How do we rate people?. By their ability to pay (Just like income tax)
    1. A local sales tax, in conjunction with,
    2. A local income tax
    3 And yes an element of taxing a property also, depending upon its demand on local authority services.
    Too hard to administer ?. Just think about it for 5 minutes.

    David Ayers Says:

    August 16, 2009 at 4:43 am | Reply edit

    Thanks Geoff.
    I think you have enunciated a problem that many have thought about over the years – and that includes me. I don’t so much support property-based rates as accept that we currently have them and that they should be as fair as possible. Problems that have been identified with local income taxes include keeping track of people when they shift from district to district. Local sales taxes may influence where people shop if one district as a different level of tax than its neighbour.
    What has been suggested is that a small part of GST be allocated to Local Government, probably on a property basis.
    Central Government being a conduit for Local Government does however lead to the suspicion that the former will want to decide how the mony is spent, rather than local residents. This happens now with roading, where much local spending is subsidised through fuel tax and the NZ Transport Agency, who exercise a lot of say in how the money is used.

  2. Angry Farmers « David Ayers' Weblog Says:

    […] For an earlier comment see https://davidayers.wordpress.com/2009/08/07/if-you-are-a-farmer-why-have-your-rates-shot-up/ […]

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