Farmers have a keen interest in local government. Councils are responsible for the regulation of natural resources, including land, water and air, which are of great importance to farming. Councils also regulate other activities, such as building, dog control, etc., and they provide critical infrastructure and a wide range of community services.
Roles and Responsibilities
Federated Farmers supported changes to the Local Government Act to focus councils on meeting the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses. However, while necessary and desirable refocusing the purpose of local government is not sufficient to address concerns about a growing rates burden.
The Productivity Commission’s 2013 Inquiry into Local Government Regulatory Performance was highly critical of central government processes and also expressed concern about capability of many councils to effectively respond and undertake new or expanded roles. The Inquiry made a number of recommendations to remedy the situation but disappointingly very few have been picked up by the Government.
Restructuring councils into fewer, bigger units has been promoted as a way to reduce the cost of local government. In some cases it might be but the evidence is mixed with many bigger merged entities overseas and in New Zealand growing bigger and more remote from their communities and costing more to run rather than less. Strong opposition has killed recent attempts to amalgamate councils into larger areas.
Federated Farmers has no national position on local government restructuring. Any position to support or oppose a specific proposal is made on a case-by-case basis at a local level, weighing up the pros and cons for farmers.
Federated Farmers believes that the next step in local government reform must be reform of funding to reduce the reliance on property value rates.
Modern local government is broadly empowered in terms of its roles and responsibilities but it is restricted to a narrow, archaic funding base, which is over-reliant on property value-based rates. Property value rates bear no relationship either to a person’s relative ability to pay or use of a service. Rates prevent communities from fully assessing the costs and benefits of council activities and rates are a heavy tax on farmers’ key asset, land, to pay for activities many of which they rarely, if ever, use or benefit from.
The situation is exacerbated by central government imposing new or strengthened roles and responsibilities on local government often with little engagement with the councils who are expected to implement and enforce the changes, let alone provision of funding for councils to carry out the resulting work.
Looking ahead, demographic change will also have an increasing impact on the financial sustainability of councils, especially those with static or declining populations and ageing extensive infrastructure that needs to be renewed or replaced.
Earthquake Prone Buildings
Federated Farmers welcomed the Government’s decision to exempt farm buildings from its requirements for earthquake-prone public and commercial and industrial buildings which will save farmers from potential costs of $3,000 per assessment (or $170 million across the industry).