Targeted rates on forestry are set to rise year by year until 2026-27. Photo / Bevan Conley
Targeted rates on forestry are set to rise year by year until 2026-27. Photo / Bevan Conley
Forestry properties in Whanganui are facing a 113 per cent increase in targeted rates next year - a move the district council has been planning for six years.
The current rates will bring the council $135,000 from 212 properties in the 2023-24 financial year but that could move to $287,000in 2024-25.
Since they were set in 2018, targeted rates have made up 60 per cent of the cost of repairing roads damaged by logging, with the general roading rate - paid for by Whanganui ratepayers - making up the rest.
Whanganui District Council chief financial officer Mike Fermor said six years ago the council expected the targeted rate to jump to $294,000 for 2024-25 so it was “there or thereabouts” in terms of the proposed new rate.
That was based on the age of individual plantations, which were set to be harvested.
Fermor said there had been robust discussions on the issues in 2018 and the “argument still holds”.
“[There is] the public good element of forestry to Whanganui and I’m also conscious the average rate is more than doubling.”
Councillor Rob Vinsen said the forestry sector, in pushback, usually pointed to the fact it was rated for 25 years before it did any damage to roads - when it was time to harvest.
“Is there any logical argument we put up to mitigate that? It seems to be difficult to argue against.”
Whanganui District Council chief financial officer Mike Fermor. Photo / Bevan Conley
Fermor said targeted rates weren’t perfect mechanisms, especially when it came to forestry.
“We admit that up front. I’m going to be bold here and say there is no viable alternative.”
Capital values of properties, which were used to allocate the general roading rate, were significantly lower on forestry properties than on other farms, he said.
“Forest harvest is usually about a 27-year harvest. For those 27 years, [foresters] are actually accessing those properties - they have to do pruning.
“The [general] rate they pay covers that sort of stuff but it doesn’t cover the impact the logging has on the roads. That’s why we introduced the targeted rate.”
Speaking to the Chronicle, Forest360 director Marcus Musson said rates rises added incrementally to forestry being less economic in regions such as Whanganui, which was a reasonable distance from a processing facility.
“Forestry is a big employer in town and the more impediments we put in the way of it, the less investment you’re going to get in it,” he said.
“A levy system is a good way of doing it and we’ve discussed it with the council before but it didn’t come into effect.
“I think it’s time we have a national discussion on [using] levies rather than targeted rates. You can’t tell me the revenue generated from targeted rates will be there in 25 years - when we need these roads up to speed for the next [forest] rotation.”
Musson said a potential levy could operate similarly to the forest growers levy, which collects money for research, development and promotion.
In the council’s draft long-term plan for 2024-2034, the targeted rate would increase by a further 6 per cent in 2025-26 and 13 per cent in 2026-27.
Fermor said officers were not aware of any other council with significant logging in its area that used an alternative funding mechanism.
“We are in line with what the rest of the country is doing.”
According to his report at the workshop, in 2018 several meetings were held with forestry sector representatives to discuss funding alternatives that would not pass undue risk or cost to the general ratepayer.
None were agreed upon.
Mike Tweed is an assistant news director and multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily the Whanganui District Council.
