This is because a change from pasture to trees will lower the land value assessed by Valuation New Zealand because of the potential costs that would be incurred in returning forest land to pasture. On the other hand, in a market where forest buyers are pushing land values up, gross rate revenue potentially increases significantly. Similarly, if it is mostly scrub-covered land that is being converted to forestry, land value and rates payable will rise. In the past, forest companies have expressed concern at attempts by local authorities to impose additional revenue collection measures such as differential rating or special grants, rates or bonds on forest owners. Current ratepayers are also concerned at the additional costs of road maintenance and improvement and the subsequent increase in rates that log transport is likely to impose.
Differential rating is a difficult policy instrument to use for roading.
Establishing rate levels on the basis of the use of services leads to complicated administration and difficulties in assessing relative use. For example, farms in Wairoa District with forestry plantings would conceivably also have to be rated at a higher level on planted land under a differential rating system. In any case, there is currently no accepted method of calculating the extraordinary damage resulting from a single road user as distinguished from damage caused by other road users. These decisions suggest that Councils must take into account the level of services received and that the value of a differential rate must bear some reasonable relationship to the reason for the differential. A number of rural feeder roads will require significant upgrading for harvest use over the next 10-15 years.