Farmers briefed over rates

22:54, Feb 21 2013

No matter what model was used to allocate rates, there would always be winners and losers, Marlborough farmers were told yesterday.

About 20 Marlborough farmers attended a meeting at the Marlborough District Council chambers, to be briefed on how the council sets rates.

Council manager of corporate finance and chief financial officer Martin Fletcher gave an overview of the rating system, and how roading was included in the rates.

Marlborough Federated Farmers president Gary Barnett called the meeting to address the rates increases faced by some farmers in the past financial year.

The council increased the overall rates take by 3.57 per cent last year, although some properties' rates increased by up to 40 per cent.

Mr Fletcher said council set rates within the framework provided by the Local Government Rating Act. Rates were made up of a complex formula, based on valuations done by independent agency Quotable Value (QV) every three years.


The challenge for council staff in recent years was the decrease in land values, Mr Fletcher said.

At the last valuation in 2011, residential values in Blenheim decreased by 14 per cent overall, and vineyard values decreased by 40 per cent overall.

He gave a few examples of how council could make changes to the council's current model.

One example was doing away with the six rating areas, which predetermined how much people paid for services such as the aquatic centre, and having flat rate across the region.

Another model suggested switching from land valuation to capital valuation to calculate rates.

In all models, there were winners and losers of varying extremes.

Mr Barnett said the presentation was useful for farmers, so they would be better able to offer some solutions when this year's rates were put out for public consultation.

He was supportive of the capital value system, which would cause some pain for some people for a short time, before levelling out.

"The council are the only business in the world with a fixed income, but the rates system does not reflect the ability of the community to pay."

If valuations were done every year, instead of every three years, it would help smooth the peaks and troughs, although it would be costly to administer, he said.

Awatere farmer Greg Harris said he had no problem with the current rating system, but it was useful to have the information.

The main issue was farmers' costs had inflated in 2011 and the massive rate hikes faced by some properties added to the pressure.

"All costs are going up and at the same time our income is going down, it makes it a bit tough."

The Marlborough Express