Farmers want fair go from councils

Federated Farmers believes actual road use should be the basis for contribution to the costs of...
Federated Farmers believes actual road use should be the basis for contribution to the costs of the roading network, rather than property value. Photo by the ODT.
Federated Farmers has made a plea for local authorities to focus on undertaking core activities efficiently and effectively and funding them in a fair way.

The rural lobby organisation has released ''The Farmers' Manifesto'' outlining its local government priorities ahead of this year's elections.

Funding and management of rating systems were key concerns for the agricultural sector, president Bruce Wills said.

Over the decade 2002-12, the annual amount local government took in rates had increased from $2.35 billion to $4.65 billion, a 98% increase which was more than three times the rate of inflation.

An analysis by Federated Farmers of councils' 2012 long-term plans revealed that, despite a recent slowdown, rates were still forecast to rise 58% by 2022, double the forecast rate of inflation, while councils' total public debt was forecast to increase 97% between 2012 and 2022.

Federated Farmers believed councils should ''do what their ratepayers have to do'' - make do with the money they have and drive costs out rather than ''constantly asking for more''.

That meant setting priorities ''rather than trying to be all things to all people'', the manifesto said.

The notion that property value reflected anything useful about who could afford what had ''had its day''.

''For rating purposes, farms are valued at their potential sale price without regard to debt or earnings.

This is not a credible measure of ability to pay, but is rather like assessing someone's wealth on the basis of the car they drive.

It may not be bad for an everyday guess, but good public policy isn't based on guesswork,'' Mr Wills said.

The ''really tough thing'' for farmers was they were often remote from the majority of council services, except local roads, and usually paid at least $5000 or more in general rates a year.

Many farmers paid more than $10,000 and a growing number were in the $20,000-$50,000 category, the report said.

Councils had many ways of reporting and modifying property value rates to ensure all property owners made a fair contribution which was transparent and reasonably consistent from year to year.

Those mechanisms included targeted rates, uniform charges, differentials, rates caps and rate remission policies.

If a council made effective use of those mechanisms, the allocation of rates could be ''smoothed across the entire community''.

''It removes some of the absurdities and ensures that a council's true costs are not hidden from voters, either in the rural areas and among the higher value properties in town.''

As farmers' reliance on the roading network was higher than that of the average ratepayer, councils often claimed they were being ''subsidised'' by other ratepayer categories, Federated Farmers said.

That was in turn used as a rationale by some councils to justify the requirement for farmers to pay much more than the average ratepayer for toilets, libraries, new stadiums ''or the myriad other urban-focused council activities funded from rates''.

The idea that farmers were not contributing sufficiently towards the roading network was frustrating, considering the high amount of rates they paid and the fuel taxes and road user charges they were also subject to.

The organisation believed it would be preferable if actual road use was the basis for contribution to the costs of the roading network, rather than property value.

Mr Wills said farming was ''hugely impacted'' by local government's regulation of natural resources - land, water and air - all of which were ''critical'' to the nation's food production and economy.

Farmers looked to councils for a practical and commonsense approach to regulation, he said. Funding tourism's promotion on the basis of general property value rates was particularly frustrating for farmers, the manifesto said.

If a council was in the business of promoting tourism, then the cost of promotion should be targeted at those businesses - tourism, entertainment and accommodation especially - given those businesses directly increased their incomes as a result.

Farmers recognised tourism was a ''big earner'' but tourism operators also needed to take responsibility for the promotion of their industry.

Rating farms to fund general economic development was ''equally worrisome''. Agriculture generated 66% of all merchandise exports and, for a council to take money from a farm business in an attempt to grow the local economy was ''counter-productive''.

The best things a council could do to promote economic growth and development was to keep rates down while ensuring it had good infrastructure.

It should also implement regulation that did not impose unreasonable costs on businesses and individuals, the manifesto said.

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