From our Chair: Canterbury rates and farming
Rates – it’s a five-letter word that makes most people’s eyes glaze over, although I suspect that isn’t so much the case in the farming sector. Unfortunately, thanks to an ever-increasing cost of living, rates rarely go down.
Rates in rural areas
It can seem like farmers pay the lion’s share of our region’s rates and are thus the hardest hit by any rates increase. This is due to the number of targeted rates farmers have to pay – often for flood and river protection – and also because many services are paid for through ‘general rates’ – those that go up the higher the value of your property.
Farmers also pay ongoing fees and charges for consenting and monitoring of consent conditions.
Why we need to increase our rates
The headlines for our draft Long-Term Plan 2021-31 will no doubt be causing angst: “24.5% rates increase for Environment Canterbury”.
What the headlines don’t address generally is why.
Without rates, we would not be able to offer the regional and local programmes that protect and improve our air, water, land and biodiversity.
Nor could we properly monitor consents, or provide region-wide public transport services and emergency management protection.
The environment has never been more at the forefront of the public’s minds.
The rural sector has been on to this for some time now – all the while taking a large share of the blame for the pace of change or what isn’t being done. The rest of the population is catching up – and Environment Canterbury has responded with the draft Long-Term Plan.
By making a stand to put climate change, the environment and the wellbeing of the community at the heart of all we do means we have to think laterally and aspirationally about how we can make a difference in the future.
There is a cost to the region if we don’t do this. We aren’t immune to the fact that there is also a considerable cost – financial and in terms of action that needs to be taken – if we do this.
On top of what we believe is a call from the community to do more and faster, there is an increase in central government expectation.
This is seen in the release of new legislation such as the Essential Freshwater and Three Waters Reform packages, which will require investment and a new approach from councils and the community across the country.
The COVID-19 pandemic and regional and national recovery throw further spanners in the works for our planning over the next 10 years.
Central government has responded with considerable funding to enable us to tackle flood control and rivers projects. Again, this requires input from our community also, but is an opportunity worth taking up.
Keeping rates affordable
To help mitigate the impact on higher value property owners – as we do know that having a high value property doesn’t automatically equate to an increased ability to pay more, urban or rural - the councillors have proposed an increase in the number of services that would be paid for through a flat fee (known as a uniform annual charge) regardless of the value of your property.
It’s worth taking a moment to check out our rates calculator to see what your rates increase could be under the two options we have put forward for feedback.
For example, under option one, a farmer in the Ashburton District with a property worth $4.96 million would pay $4678.37 in the 2021-22 year, $735.85 more than this year. That’s an additional $14.15 a week.
Under option two, that same ratepayer would pay an extra $606.31, or a total of $4548.83 for the year. $11.66 a week.
The two options proposed in the draft Long-Term Plan layout $246.54 million of work in the 2021-22 year (option 1), or $240.19 million in the 2021-31 year (option 2). Our current spend is around $200 million per annum.
What I am trying to illustrate is that for an additional $11.66 a week (for example) you would be contributing to another $40 million of work over the year.
Whichever way you look at it, the proposed rises for farmers are not insignificant - daunting, even, for some. The council wants to keep rates – which account for a little under 60% of our income – affordable, but the challenge is being able to make progress with key programmes for our communities.
Getting the right balance is difficult and the affordability debate has been hot around our council table.
Other sources of income
The rest of our income comes from user-pays, and central government grants (mostly for public transport). We can also use council reserves and we have the option to borrow money for some activity.
Farmers, as business owners, will understand better than most that, while these may better spread the impact of rates rises across several years, they both have fishhooks in terms of repayments and potentially not having sufficient reserves for when you really need them.
Talking of reserves, in both the options put forward in the draft Long-Term Plan, we have allowed for some top-ups. Particularly for flood control and civil defence – both essential for keeping communities safe.
The Council is fronting up to the climate emergency and its environmental and societal repercussions.
Have your say
The draft Long-Term Plan is open for consultation with our community until 11 April, and we are keen to hear from you. Tell us what you like and what you don’t like.
For more information, or to make a submission head to haveyoursay.ecan.govt.nz/LTP.