The Central Otago District Council has been praised by Federated Farmers for reining in its proposed rates increase to 4% this year but the organisation says a funding policy review is vital.
Federated Farmers is one of 71 submitters to the draft annual plan. The council's four community boards have considered submissions relating to their respective wards, and the council meets today to deal with submissions on district-wide issues.
Federated Farmers policy adviser, David Cooper, said the council's plan to defer some capital projects and decision not to fully fund depreciation reflected an understanding rate increases had to be measured.
However, using land value as a basis for the general rate disadvantaged farmers and he submitted the basis be changed to capital value.
"While capital value has little correlation with the extent to which a ratepayer uses the services provided by council, or a ratepayers' ability to pay, land value's connection with these factors is even more tenuous." The result was that the farming sector was asked to shoulder more of the rating burden than was equitable, due to the farmer's reliance on land as the primary productive asset.
Differentials used to tailor the rates for tourism and promotion activities in the district was a "positive first step" towards funding economic development and tourism promotion more equitably, Mr Cooper said.
However, he said farmers "may well wonder why they are asked to pay anything at all towards expenditure that primarily benefits commercial interests in the district".
A targeted rate for tourism and promotion to "capture" those direct beneficiaries would be fairer, Mr Cooper said.