Fed Farmers reject Hawke's Bay council's roading rates

The district's 1200km of roads are costly to maintain and renew with the district's small rating base, says council chief executive. Photo / File

Federated Farmers say a planned roading rate disproportionately hammers Central Hawke's Bay farmers.

The lobby group plans to challenge the Central Hawke's Bay District Council over the rate in its proposed Long Term Plan 2018-2028, but council chief executive Monique Davidson said costs would be offset to some extent by a reduction in the general rate.

Federated Farmers senior policy advisor Rhea Dasent said the rate, struck on land value, meant a medium-value farm would pay more than $4000 towards roading.

"The farmer certainly does not receive a corresponding value for that money, especially when compared to an urban Waipukurau ratepayer, who will contribute $207.

"One Federated Farmers member will be contributing a whopping $27,000 towards the roading rate alone this year. That is a lot of days out working for the council, let alone the tax man."

Davidson acknowledged that the rural community was an important economic cornerstone for the district, but noted that the general rate on capital value had dropped from 0.124 cents per dollar to 0.118 cents per dollar in the proposed plan.

"So we have achieved some savings in the general rate, which will have the most effect on the farmers with the largest capital holdings."

The $27,000 bill could have been a lot more if this was not the case, Davidson said.

She said about a third of the council's total income was spent on about 1200km of roads in the district.

Dasent claimed that since 2015, unsealed roads in the area had only reduced from 403km to 401km, so all the money was going towards maintenance, but Davidson said only 40 per cent of the budget went to maintenance, and the rest was spent on renewing roads.

"Based on our roading budget of just under $11 million the cost is about $9000 per km per year - about $3000 to $4000 is spent on unsealed roads grading and metalling, but this does not include drainage or culverts."

She asked Federated Farmers to consider the extent of the network with a small ratepayer base, and the fact that urban residents did not use the rural roads as much as farmers did.

Dasent argued that although farmers generated heavy traffic and a lot of wear and tear on the district's roads, this was already accounted for through road user charges and fuel taxes, which were re-allocated back to the council from NZ Transport Authority.

"So the trucks that visit the farm property are already paying for the kilometres they drive to collect the farmer's produce and take it to processing facilities."

But Davidson said income from road user charges was not ring-fenced to be returned to the district it was generated in.

Federated Farmers want the council to put in a rating system that other councils had used successfully, such as a differential system, as used by Hastings District Council, or a hybrid funding model with a flat fee to reduce reliance on the land value rate like Kapiti Coast District Council.

Davidson said suggestions received during the Long Term Plan consultation would be considered by elected councillors.