Tasman District Council (Validation and Recovery of Certain Rates) Bill

I move, That the Tasman District Council (Validation and Recovery of Certain Rates) Bill be now read a first time. I nominate that the Local Government and Environment Committee consider the bill.

I have to say I am not overly enthusiastic about bringing retrospective legislation to the House. However, I am a very proud local member, and I have spoken to the Tasman District Council and agreed to sponsor this bill into Parliament where a select committee can give it due consideration.

The purpose of the Tasman District Council (Validation and Recovery of Certain Rates) Bill is to correct a number of irregularities that occurred when the council set and assessed the rates for the Tasman District Council between 2003 and 2009. The council also wants to address the irregularity with the Ligar Bay and Tata Beach stormwater rates that were set for the 2006-07 financial year. Legislation is now the only way for the council to validate these rates assessments, and thus provide certainty for both the council and ratepayers. The bill proposes to validate the rates set and assessed by the council from 2003 to 2009 and any penalties added to those rates, to treat all rates payments received by the council as having been lawfully paid, and to authorise the council to recover any part of the rates and penalties for those years that remain unpaid. The bill also proposes to validate the stormwater rate for Ligar Bay and Tata Beach for the 2006-07 financial year, as I said.

The origins of the bill lie with a 2006 decision by the council to include the Tata Beach settlement in an urban stormwater drainage area. The decision was challenged by a ratepayer and led eventually to a review by the Office of the Ombudsmen. I am sure that that ratepayer will present to the select committee and put forward some very sound arguments for his position. It was found at the time that the rate was not properly imposed. The council had not complied with the Local Government (Rating) Act 2002, because it did not identify the category of rateable land in Ligar Bay and Tata Beach on which the rates were set and assessed. In addition, it failed to include a map showing the location of the Tata Beach drainage area.

The council then reviewed its processes and rationale for including the Tata Beach settlement in this rate and drainage area. It did this through a consultation process with affected ratepayers, where three options were considered. In the end, however, the council determined that the status quo should remain and that the inclusion of Tata Beach in this drainage area should be maintained.

I should say at this point that Ligar Bay and Tata Beach can be found in Golden Bay, about 20 kilometres from Tākaka, which is about an hour’s drive from Nelson. As the name suggests, they both possess stunning, golden sand beaches and are a wonderful place to holiday, should you have that privilege. There is plenty of accommodation, from basic through to de luxe, and I would recommend this area, as I said, to anyone wanting to come down and visit a wonderful electorate.

However, this business with the stormwater drainage area prompted the council to undertake a separate review of its total rates-setting process for 2006. This was subsequently extended out to cover the years of 2002 to 2009, and the review identified additional procedural errors in the way that the rates had been set between 2003 and 2009. Again, the council was found to be in breach of the Local Government (Rating) Act 2002 because of the way in which it set and assessed the rates during these years. These included, firstly, a failure to resolve and set and assess rates in accordance with section 23 of the Act, for some years; secondly, resolving to adopt rates before the council had adopted the annual plan and funding impact statement; thirdly, a failure to state the financial year in which the rates applied, that they were payable by instalments, and the date that they were to be paid by, for some of the years; and, fourthly, a failure to resolve to authorise that penalties were to be added to rates not paid by the due date.

The council’s practice of using its annual plan as its source of rates setting, instead of resolving each rate individually, was found to be in breach of the Act. This is because the decision to adopt the annual plan did not also mean that a rate had been adopted. This has raised questions about the validity of the rates and leaves the council open to rating challenges. Validating legislation is now the only way to correct the breaches and give certainty to all parties concerned. The council accepts that it has made a mistake and is now taking steps to correct the situation.

I do hope that the Local Government and Environment Committee will give this bill a good and thorough hearing and allow all parties to present their submissions, but at the same time return it to the House in good time.

Before I end my speech I must say that I have met with a number of ratepayers from Tata Beach and Ligar Bay. They are concerned about the process, and they will no doubt bring to the select committee what sparked this off in the first place. Believe it or not, it was the replacement of a large drainage pipe for a new area of a subdivision that did not affect the main area of Tata Beach, which has been there for some time. They have, as the Ombudsman and others have identified, a legitimate claim on the council for, perhaps, a change. The council has been caught in a situation where it does have to validate these rates.

As I say, I am a reluctant sponsor of retrospective legislation. The main area where we seem to have this in the House is over fisheries legislation. This is not the case here. It is local government. Mistakes do happen from time to time. I know each and every one of the councillors, in good faith, took advice from their staff and of course assumed that they had put in place valid rating claims on the ratepayers. So this is perhaps a long and drawn-out, and quite expensive, process, but it is one that we have to go through none the less.

I commend the bill to the House. I hope that the Local Government and Environment Committee will give all submitters a very fair hearing and make any adjustments necessary to ensure that this piece of legislation protects the ratepayers and the council of Tasman District, as well, but ensures a fair process for all ratepayers, both now and into the future. Thank you.

I rise to speak on this Tasman District Council (Validation and Recovery of Certain Rates) Bill at its first reading. As we have heard, it is a local bill sponsored by Damien O’Connor. National will be supporting this bill going to the Local Government and Environment Committee. As we have heard from Damien O’Connor, the bill will validate rates set by the Tasman District Council for the period from 2003-04 to 2008-09, during which time the council, unfortunately, did not follow correct process in setting rates. The bill will also validate rates and penalties paid over that period, authorise the council to recover any unpaid rates, and ratify the Tata Beach and Ligar Bay stormwater rate, which Damien O’Connor has so clearly articulated to us.

So how did the Tasman District Council get to this position? Well, from 2003-04 to 2008-09 the council passed rates attached to the annual plan, rather than ratifying each rate individually. The council also set rates before it had adopted the annual plan. Both activities breached the Local Government (Rating) Act 2002. The Act actually provides an avenue for councils to amend incorrectly set rates, but the window of that time has now passed, so this bill has come to Parliament.

Damien O’Connor, the bill’s sponsor, has discussed the concerns of ratepayers and is convinced that the select committee will provide residents with an opportunity to express their views and for any appropriate changes to be made. National also wants to give affected residents the opportunity to engage with the select committee, and is therefore supporting this bill at its first reading.

The Government’s Better Local Government reforms are designed to make local government more efficient, more responsive, and better focused, and that work includes a stream of work to monitor and improve council performance to help prevent future procedural errors such as these. The fact that the bill is coming to Parliament will raise these issues with other councils and underline the importance of correct procedures when setting rates. In relation to the Tasman District Council processes, the bill is needed to validate certain rates set incorrectly. Without validation, the council remains vulnerable to legal challenge from ratepayers over incorrectly set rates, and is unable to recover unpaid rates and penalties.

I can assure Mr O’Connor that the Local Government and Environment Committee looks forward to working on this bill and will give every submission a fair hearing. This is an important bill, and we look forward to that work. Thank you.

First of all, can I commend the very good local member for West Coast - Tasman for bringing this bill to the House. He is a member who works very hard in his constituency and is very close to the issues of concern in his electorate, and he has secured himself in the wonderful seat of West Coast - Tasman for as long as he wishes to be there.

But he is reluctant, I have to say, to bring this retrospective legislation to the House. We all understand why. As politicians we do not particularly like retrospective legislation, but every now and then there is a need for us to examine an issue and make a decision on it. That is what is going to happen with this bill, the Tasman District Council (Validation and Recovery of Certain Rates) Bill.

I can assure Damien O’Connor that we will give his constituents who appear before the select committee a very good hearing. The Local Government and Environment Committee is very used to such matters, in terms of dealing with local government and giving constituents a good hearing. So, Mr O’Connor, I am sure the chair will give your constituents plenty of time to express their views. Maybe we could even take the select committee over to Ligar Bay or Tata Beach. I think it would probably be very good to go where the locals are and really get amongst the grassroots—the sand, the sun, the beautiful scenery, a bit of kayaking, and so on. Like Damien O’Connor, I am very familiar with this part of New Zealand, and it is a superb area.

But there is a problem. There is a problem that means we need to validate specified rates that cannot otherwise be validated in the Tasman District Council area. We acknowledge that there are issues with the bill, and we will be looking to ensure that any changes we make are ones that are appropriate.

I think if you look at the problem that came to the council’s attention—Damien O’Connor made a good point—the councils themselves, in good faith, believed that they were doing the right thing, but a number of irregularities have occurred in the setting and the assessing of rates in the financial years of 2003-04 to 2008-09 inclusive. Questions have been raised around the validity of those rates. Damien O’Connor did set out what they related to. They were things like a failure to resolve to set and assess rates in accordance with section 23 of the Local Government (Rating) Act, and that happened for a number of years; resolving to adopt rates before the council had adopted its annual plan and funding impact statement; a failure to state, in accordance with section 24 of the Act, the financial year to which the rates had applied, that the rates were payable by instalments, and the dates by which the specified amounts were to be paid for some of the years; and also a failure to resolve to authorise the penalties that were to be added to the rates that were not paid by the due date. These irregularities can be fixed only by legislation in this Parliament.

This bill will go to the select committee. We will hear the reasons why. I do have to respond to Nicky Wagner, who raised at the end of her speech how Better Local Government is going to ensure that this sort of thing does not happen. Perhaps I could point out that up until around 1992, Tasman was a district council that had a regional council, which dealt with many of the issues that it is having to validate, but it was the former Minister of Local Government who pushed and fought to turn the Tasman District Council into a unitary authority and to abolish the district council—

💬 Hon Damien O’Connor: The regional council.

—the regional council—which has led to a change in the way it operates.

Perhaps we should not be too sure about any local government changes that have been suggested by Nick Smith. I have to say I have some grave doubts about the changes that are coming about by Better Local Government. I would not be surprised if in the future we are not back here passing legislation to fix up yet another Nick Smith mistake, including the removal of the four well-beings, which councils up and down New Zealand oppose.

So we will give the bill a good hearing, and ensure that what needs to be fixed can be fixed.

National is supporting the Tasman District Council (Validation and Recovery of Certain Rates) Bill going to the Local Government and Environment Committee. This bill will validate rates set by the Tasman District Council for the period between 2003-04 and 2008-09, during which time the council did not follow correct process in setting rates. Thank you.

Tēnā koe. Thank you. I am pleased to take a short call on the Tasman District Council (Validation and Recovery of Certain Rates) Bill. The Green Party will be supporting this bill. I thank the office of the Hon Damien O’Connor for the background information he provided. Certainly one of the intriguing things about being an MP is the quite eclectic mix of local bills that we have to deal with and that are referred to the Local Government and Environment Committee. I suspect that at the select committee we will learn quite a lot more about how the Tasman District Council manages its stormwater, particularly at Tata Beach and Ligar Bay, and how the council’s rating systems work.

I had a bit of a look at the activity management plan for stormwater on the council’s website. These two quite small settlements have grown up as a series of baches. The baches were close to the beach, and then as they have built up the baches and houses have expanded—of course you have got the national park nearby, and you have got a lot of self-contained pipes and stormwater systems—there has been some observation of flooding issues at Tata Beach. So the council, in endeavouring to address some of these issues and new subdivision development, and to provide the stormwater systems for future growth in the area, has obviously spent money to do this, and the bill is a result of one ratepayer challenging the rates to fund that expenditure.

Both the Hon Damien O’Connor and the Hon Annette King have explained some of the mistakes that the council made in setting the rates, because the whole process of finalising an annual plan and a long-term plan involves a series of quite detailed resolutions. The Tasman District Council got it wrong because it set out that information in the annual plan resolution when it should have been in a separate resolution. There were some issues too around the lack of maps for the Tata Beach urban stormwater drainage area.

It was the challenge by the ratepayer and the Ombudsman reviewing the way the rates were set that led the council to realise that there were quite a number of procedural errors from 2003 onwards. It was interesting to read an article in the Nelson Mail where the council had apparently decided that it would be cheaper to have the matter dealt with by retrospective legislation in this House rather than to engage in sustained litigation with Mr Schmuke and others. Certainly it might be cheaper for the council, but given the cost of parliamentary time it may not be cheaper for this House. But given that the wrong process was used, it is important that that is fixed and that the setting of the rates is validated, which is why the Green Party will support the bill even though it is retrospective.

I would point out that this bill is in sharp contrast to the one we were debating here yesterday, the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill. Although we now have National members supporting the validation of the rates-setting process, in Canterbury there is no ability for residents to elect councillors who will provide that representation for the taxation that rates represent and to have elected councillors making decisions about the level of rates and the priorities for spending those rates. So we have Canterbury residents generating $84 million in rates each year, but having no elected councillors to represent them in decisions on how those rates should be spent.

Nicky Wagner commented about Better Local Government. When National introduced those savage attacks on local government—including the removal of the four well-beings—the former Minister of Local Government Nick Smith used that cheap, populist trick of attacking rates that councils set and the level of those rates. Yet when you think about rates, if we are paying $6 a day, on average, which is what people pay, for the whole suite of services that councils provide, it is very good value for money. I look forward to the select committee and to understanding and learning a bit more about the services that are being provided in Tata Beach and Ligar Bay in stormwater management and the rates that are being paid to deliver those. Thank you.

I stand to support the Tasman District Council (Validation and Recovery of Certain Rates) Bill. I look forward to hearing about it in the Local Government and Environment Committee. It is a good, key part of performing and improving local government in New Zealand. Thank you.

I take a call on behalf of New Zealand First on the Tasman District Council (Validation and Recovery of Certain Rates) Bill, and also we congratulate the Hon Damien O’Connor on bringing this to the House to rectify an administrative error by the Tasman District Council in the way it sets its rates and, in particular, the legal clauses that were required for its rating structure to be legal.

This is very much an administrative matter and just puts right things that are required, which were brought to the attention of the council by a particular ratepayer or ratepayers, and, quite rightly, it does have to be rectified in law. However, it does raise the issue of local government, and it is quite a pertinent topic at the present time, particularly under this Government, which has such a low regard for local government and treats local government like a third-class citizen, basically.

Really, this Government would love to do away with local government in its entirety. It has done its best to do that in Auckland by putting 75 percent of local government under council-controlled organisations of non-elected people who are basically invisible and non-accountable to the ratepayers and residents of Auckland. Also, the Auckland councillors can no longer get information from any of those council-controlled organisations. Despite requests for information from those organisations, the councillors of Auckland are denied information in many cases from those very organisations that report to them.

So it is very interesting that the Tasman District Council has been caught out in this manner, but it also highlights the difference between many of our local councils. There are certainly different levels of expertise within local government. Across the approximately 78 local authorities in New Zealand, you go from very large councils—certainly Auckland now, with 1.4 million people—down to very, very small councils for only 3,000 or 4,000 people. Therefore, the level of expertise within each of those councils can vary, and, of course, their ability to provide expertise can, because of their financial resources, also vary greatly.

In that respect, I would just like to pay tribute to Local Government New Zealand, the body that pulls local government together. It has a great team of people under Lawrence Yule and Malcolm Alexander—the president and the chief executive—and they certainly do a good job in terms of supporting the local authorities in New Zealand and all those who provide services to local government in New Zealand to help them through their various requirements.

Certainly in this area it would be very helpful for some of the more senior councils perhaps to play a more leading role in overseeing some of the other, smaller councils in their daily business. Certainly it was our experience, from a North Shore perspective, that we had some very senior staff who used to enjoy spending time with other councils, passing on some valuable insights, valuable experience, and expertise to some of the other, smaller councils around New Zealand. We were delighted that, as the fourth-largest council in New Zealand, we were able to impart some of our knowledge and experience to some of the smaller ones that could not necessarily afford the same level of resource.

In this particular case, the Tasman district is a wonderful district that is well-known to all New Zealanders. It is one of the jewels in the crown of the New Zealand environment, with beautiful areas. I have greatly enjoyed visiting Golden Bay and all through that area, tramping the Heaphy Track and all through the whole of that part, and going into the Tākaka caves. If anyone has not been to the Tākaka caves, I can assure you it is an experience that you should have.

So certainly it is a necessary thing for a very important area of New Zealand—a provincial, effectively rural area of New Zealand that is very important to this country—to have all its ducks in a line and have everything ticked off; its i’s dotted and its t’s crossed. This is also something that probably will be picked up by other councils through New Zealand. No doubt, if this has occurred with Tasman District Council, there may well be other councils that will learn from this experience and be a little bit more mindful in the future to just make sure that their officers and their people who are drawing up their various documents are 100 percent correct in the manner in which they put them out to the public to meet all the legal requirements. So New Zealand First will be supporting this local bill.

I rise to speak in support of the Tasman District Council (Validation and Recovery of Certain Rates) Bill. The Tasman District Council got itself in a jam and it needs to be got out of it. I hope this bill will highlight to other councils the importance of proper scrutiny when setting their rates. I support this bill. Thank you.

I am somewhat surprised at the debate that has been going on over the Tasman District Council (Validation and Recovery of Certain Rates) Bill and the contributions that have been made. I want to pick up one of the points that my colleague the Hon Damien O’Connor made at the outset, which was that he introduces this retrospective legislation in the case of the Tasman District Council with reluctance—with reluctance. Yet there does not seem to be much of a frisson of concern in this House for what is actually happening with this bill.

We will support it. I have for the last 5 years been living and working in Nelson. The Nelson electorate boundary incorporates part of the Tasman District Council. I meet with the Mayor of Tasman District on a regular basis—I will be meeting him on Monday—as I meet with the Mayor of Nelson on a regular basis. So I am familiar with some of the players in this. The areas that Damien O’Connor has talked about, of course—Tata Beach and Ligar Bay—are over there in Golden Bay. As other members have attested, of course it is a beautiful part of the country, but nobody loves it more than the people who live there.

I have a concern about this bill, and I urge the Local Government and Environment Committee to treat this issue very seriously. I have a concern that, in fact, the Tasman District Council is wearing the embarrassment of its mistakes and taking what it sees to be the easy way out. Paul Wylie, who was at the time the chief executive officer but is no longer, was quoted in the Nelson Mail as saying that this is the cheaper of the options. Do not fight it out in the courts with the local residents, because that will get too protracted and too expensive; go to Parliament and use the big hammer to beat the little people, and let us make what we did wrong for a number of years right by the stroke of a pen. Why are more members in this House not concerned about that? I think that is serious.

I will support the bill. The member for West Coast - Tasman has brought this bill forward in good faith to help repair a situation that has been affecting constituents in his electorate, but let this be a lesson to every local council in the country. They cannot simply and easily resort to the big hammer of Parliament to correct their bungles. Sometimes they might simply have to pay for them. I wonder whether there are grounds for the Clerk’s Office to consider whether or not, in fact, Parliament should charge more than it does for local bills to come before Parliament. It does charge a sum, and I wonder whether there should be, at times, some disincentive applied.

I raise these points because of the concern I have about retrospective legislation. It was a concern expressed by the sponsor of the bill, and he is doing this, really, to help his constituents and not to relieve the Tasman District Council of embarrassment, because embarrassed it should be—embarrassed it should be. I could refer to other instances when, in fact, the Tasman District Council has treated constituents in the electorate that I work in with some disdain and in a cavalier way. The movement of the Maitai Lodge is one case in point, but that is not what we are discussing tonight.

So this should be a lesson not only to the Tasman District Council but also, as Andrew Williams said previously, to all local bodies around the country to make sure that they have scrutinised the advice they are given. I understand that councillors act in good faith on advice that they are given, but let this be a lesson to all of them. This bill will get support, but I hope the people of Ligar Bay and Tata Beach bring their concerns to the select committee and get a decent hearing there as well. Thank you.

I would like to rise in support of my colleagues who have spoken previously on this Tasman District Council (Validation and Recovery of Certain Rates) Bill, and to endorse it to the House.

I appreciate the opportunity to reply. I would like to just briefly thank the members for their support for the Tasman District Council (Validation and Recovery of Certain Rates) Bill. I know the Tasman District Council will be eternally grateful.

We do not like, any of us, spending ratepayers’ money unnecessarily in the courts. There is still, as I have said, a point of contention and some debate. The Local Government and Environment Committee will no doubt hear about that, and I am sure that the collective wisdom of the members will make a judgment, and perhaps make an adjustment as well, to accommodate what have been legitimate grievances against the council, and the council can put its case to the members. So, again, placing faith in the parliamentary process, I am sure the Tasman District Council will be well rewarded. The bill, however, should not have been necessary, and it is a good lesson for all councils around the country.

So, thank you, Mr Speaker. I thank the House, and I look forward to the process through the Local Government and Environment Committee.

Bill read a first time.

Mana Party vote for the Noes ordered by the Speaker to be recorded in the Journals of the House of Representatives.

Bill referred to the Local Government and Environment Committee.