media release 14 June 2006

statement from David Thornton

Council Rates Increases Now Unsustainable

Time to Get Rid of ‘Magna Carta’ System of Tax Gathering

The Federated Farmers survey of council rates increases reveals that the average increase across 83 district, city and regional councils is between 7-8% for each of the next three years.

While Federated Farmers advocate greater funding from central government for roading projects, they also want to see urban ratepayers paying a bigger share of rates. The Farmers are also calling for changes to the way local government as a whole is funded.

Similarly BusinessNZ and the NZ Business Roundtable are also taking up the call for reform of funding and a reduction in ‘excessive council spending’.

Residential ratepayers are currently the hardest-hit group of ratepayers in the councry and any shift of the rates burden away from rural and business ratepayers will impact severely on the residential ratepayer.

In the three years since the 2003 ‘ratepayers rebellion’ against ARC rate increases,this Association, and others have called for governments at central, regional and local level to make fundamental changes to the way local councils are funded.

Now that the ‘heavies’ such as Federated Farmers and the Roundtable have finally come round to our point of view it is time we all worked together to rescue our local democratic institutions from impending fiscal collapse.

The present system of taxing individuals on the basis of their property value dates back to the Magna Carta which was signed on June 15th 1215 – exactly 891years ago. This is no longer sustainable.

It is high time we changed to a system which recognises the ability to pay, gives value for money, and puts restraints on local councils spending.

ENDS

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