Local Government Law Reform Bill

Rates rebates, and the way in which this Government is putting them to local government, are a perfect example of the comments that I and my colleagues have made with regard to this Government continually putting on to local government more compliance costs. The Minister in the chair, the Hon Mark Burton, will stand up and wax lyrical about the wonderful thing the Government has done for elderly folk and the poor people who cannot afford to pay their rates—that this wonderful Government has taken money out of the pockets of hard-working taxpayers, so it can give it to some people who cannot pay their rates. But the Minister does not tell the ratepayers of this country who is paying the cost of administering that. They should ask the Minister that.

The situation is the same as when the Minister said people should not worry about the long-term community consultation plans, because the audit was not too much of a cost. But as my colleagues have said, the Minister does not tell the ratepayers of this country what it cost local government to put the long-term community consultation plans together. For instance, it cost Whangarei District Council over $500,000 to put its plan together. On top of that, the district council will have to meet the administration of the dog law that the Government has just put through, and all sorts of things such as the earthquake and war damage measure, the Building Act, and the prostitution law reform legislation. The list goes on and on. On top of that, here we go with the rates rebate. The Government is loading that on to local government.

Do members know what is really disappointing with regard to this Government? It is not a matter of whether it cares about that; it does not even know what it is doing. It never occurs to the Government that someone actually has to administer these things. When somebody goes to the council and asks to have a rates rebate, local government has to have a clerk to provide the application and get the papers filled out. The clerk then has to vet the application, go through it, and make sure it is right. There is time involved, and then the application has to be processed. The council then has to put a claim in to the Government, and it goes on and on—[Interruption] It takes three people to do rates rebates? It takes one person in Waitaki, and three in Invercargill; I bet there is a whole department in Auckland.

💬 Mark Blumsky: I will tell you.

Our colleague is even going to tell us how many people there are there.

Do members know what the real worry is? My mother will go along to the council and say she wants a rates rebate. The problem is that she will not know whether she is eligible. That will cause more time and more cost. Who will pay for that?

💬 Jacqui Dean: The ratepayers.

No, my mother will pay, because she is a ratepayer. She will actually pay for something that she is trying to get for herself from this Government that she has already paid for in the first place. She has paid her taxes. She has given that money to this Government to hand to local government, so that she can then go and apply for it. How dopey is that?

That is the trouble with this Government. It never thinks about where money comes from. It never thinks about who pays. It does not care about the costs it imposes on people. It does not care about the fact that there are compliance costs and they cost ratepayers a whole heap of money. What does the Government do? Oh, no, this cosy, warm Government likes to hand out our money, and to put its hands in our pockets—I can think of some hands in my pocket that I do not actually want to be in there, but the Government puts them there anyway. I bet that sometimes it gets a bit of a surprise, but that is its problem. Then the Government takes the money out—[Interruption] Mr Williamson should think about my dear old mum, who pays her taxes.

💬 Hon Maurice Williamson: I think about her every morning when I wake up.

No, the member does not. But the point is that she pays her taxes. Mark Burton takes them from her, writes out a cheque, and gives it to local government. Then Mum goes in to the council and applies for the rebate. So she has paid taxes, and then she pays rates to administer that process so that she can get the money back again.

💬 Hon Maurice Williamson: It is no wonder the elderly are confused.

My mother is so confused she is having problems getting the roller door up and down, let alone getting a rates rebate.

The CHAIRPERSON (Ann Hartley): Before I call the Minister, I advise the Committee that the vote on Part should have been called as 111 for not 110. With the permission of the Committee, that will be amended? Thank you.

One of the tests of being a good MP is that one has to know when to give a bit of credit. It would have been perfectly fair for John Carter to take on the long-term council community plan process at the appropriate stage of the debate, but this is the time for a bit more generosity of spirit.

Mr John Carter is from a party whose last act in office in 1999 was to reach deep into the pockets of the pensioners in my electorate and attempt to take out $38,000 every week in pension cuts.

💬 Darren Hughes: Including his mum!

It is no wonder Mr Williamson wakes up every morning and thinks about the member’s dear old mum—he is still worried about her.

Let us be fair. This provision, which in my view is overdue, lifts the threshold for those who are eligible for a rates rebate, and it lifts the amount. It increases the income threshold from $7,500 to $20,000, and the maximum amount eligible has been increased from $200 to $500. That will mean the difference between 4,000 people making a claim this year and 300,000 people being eligible to make a claim in the coming year. Members should be happy to support this provision. I simply ask the National members whether they will support this provision or oppose it; and, if they are going to oppose it, will they make a pledge to reverse it at the next election?

I am sure that—picking up the comments of the Minister of Local Government—we will have a very interesting debate in caucus. As he talked I reflected on what I would have done. Would I have voted for this rates rebate scheme in its current form? If the Working for Families package had been put forward at the same time, I would not have voted for the rates rebate. I suggest that the Minister is putting even more people on to a benefit.

I take this opportunity to quote from one of the papers the Local Government and Environment Committee received. The departmental report to the select committee included a very clever little comment from officials: “It has also been noted by the Office for Senior Citizens that many elderly citizens feel comfortable making applications at their local council for the Rates Rebate Scheme but would feel somewhat alienated if the Scheme were perceived as income support that they had to apply for at a government office.” That tells me that if the Minister puts this provision through his Government agencies, the elderly—of whom this provision will capture many—will perceive it as income support and will not like it, and that is a concern.

The main thing I do not like about this measure going through the House is the cost to local government. A number of city councils made a point during the submission process of saying that they had concerns about the cost of administering the extended rates rebate scheme—in particular, the Auckland City Council, the Waitaki District Council, and the Manukau City Council. I thought I would pick up a point from the Auckland City Council submission as to why it has concerns about the implications and impacts of the Minister’s rates rebate scheme. I quote: “A review of the 2001 census data indicates Auckland City may be required to process around 20,000 rate rebate applications annually.” So 20,000 applications will have to be processed by the Auckland City Council, which currently processes 250. I suggest that it will be an incredible imposition on the workforce at the Auckland City Council who currently work on the rates rebate scheme. The submission also states: “It is likely that these costs will not be able to be absorbed at present staffing levels and will require additional resources.” That will come at a cost, and the council has figured out that the increased cost to its ratepayers will be up to $160,000. It continues: “We are disappointed by the fact that yet another Government bill is putting imposition and cost on to the ratepayer.”

Another very interesting point came through in the submissions to the select committee. A number of councils now send out a separate bill for water and waste-water services, amongst other things, and, of course, they will not be captured by the rates bill. Those councils were concerned that there needs to be a look at what is captured by the rates rebate scheme. The Government has requested further policy work on this issue, and it will be reported back in 2007.

Finally, the other issue that came up at the select committee concerned superannuitants who live in a retirement village. A number of submissions talked about the fact that because of the structure of the retirement homes that some superannuitants live in and the way their living arrangements are worked out—that is, they have a licence to occupy—they are not officially classed as ratepayers. I suggest there is an anomaly there. Those people have made that investment, and have very little income, and no doubt the costs of rates come through in the annual charges attached to the licence. We note those issues in relation to superannuitants and their retirement village arrangements. I hear that the Government, through the select committee, has noted that issue, and, again, the officials have been asked to report back on the matter. I look forward to being on the select committee when that information comes forward.