Kaipara District Council (Validation of Rates and Other Matters) Bill

I move, That the Kaipara District Council (Validation of Rates and Other Matters) Bill be now read a second time. Can I firstly just acknowledge all members of the Local Government and Environment Committee from across this House—in particular, the chair of the select committee, Nicky Wagner—for the diligent work that has been done, the very considered work that has been done, on a matter that is very complex. It is wide and varied in terms of the nature and consequence of the matters that the Kaipara District Council (Validation of Rates and Other Matters) Bill contains. It has been the subject of much concern and comment from across the district. So I want first to acknowledge everyone on the committee for the way they have got their heads round that.

No one is a fan of retrospective legislation, least of all, of course, the MP who is required or is asked to sponsor that legislation. Having to retrospectively address failures of a council to follow proper process and meet the requirements of the Local Government Act is something no one in this House takes any pleasure from or takes lightly. It is something that, rightly, gets an intense degree of scrutiny—all that is available to this House, in fact.

Let me make it quite clear from the outset that legislation of this nature is a last resort and reflective of significant failures by those who are entrusted by ratepayers. One of the questions that I want to see answered on behalf of ratepayers in accepting that the council got it wrong—and the council does accept that it got it wrong—is whether it is also the case that its overseers, Audit New Zealand, also failed in not identifying the failures of that council. I want to come back to that point a little later.

Ratepayers should be able to have confidence in their elected councillors to carry out their core functions, but in this case they have been woefully let down. Rightly, they are upset, angry, and frustrated, and have been for some time. But they also need the matters to be resolved in order to bring certainty and a sound platform to rebuild the district, and to have confidence in returning the district to democratic elections and all that they bring. This local bill we are dealing with is one part of a number of processes that are under way to help bring about this eventuality.

Since 2012—in fact, not long after I was elected—a number of interventions, investigations, and actions have actually got under way. I want to run through just a couple of those: the implementation of a Government-appointed review team and the subsequent report that saw the resignation of the sitting councillors at the time; the appointment of a team of commissioners; the review, adjustment, and adoption of a new long-term plan; and an independent inquiry into the council’s auditor at the time, Audit New Zealand. There have been inquiries from both the police and the Serious Fraud Office, with a view to establishing whether there was prima facie evidence of any criminal activity. To date, there has been insufficient evidence to warrant this, but, none the less, efforts continue. There have been inquiries by the commissioners into all other matters surrounding the failures of this council, including those of the former chief executive officer Jack McKerchar. And, of course, there is this local bill, which the commissioners asked me, as the local member of Parliament, to sponsor.

This bill has become something of a lightning rod, and rightly so. Many of the plethora of issues that the commissioners and the council have been confronted with do have a foundation back in this bill. However, I will say that what we must do in looking at this bill is look at it through a lens—in terms of the whole picture—and understand that fundamentally what this bill is doing is far less controversial and of less consequence than many of the other activities that are going on. Notwithstanding that, it is a very important part of the process.

The questions the commissioners were confronted with in dealing with the multitude of failures by the previous council were how they could best be addressed and what the best mechanism was to move to deal with these issues and to be able to move the district forward with the least amount of cost and the greatest amount of certainty. As we have seen with the Tasman District Council and other councils recently, and with some still to come, unfortunately, there are times when this House must deal with retrospective legislation of this nature. It is not a desirable thing, it is not palatable—in fact, it is quite repugnant in many respects—but it is necessary. In this case, the decision was made that this course of action was the most appropriate in all the circumstances. Although the bill is important in order to resolve the errors and failures of the council, I want to assure this House and all ratepayers of this district that accountability is just as important as any one of the other processes that are under way.

As a former police detective I can assure the House that seeking justice runs through my veins. As such, I insisted that a clause be included in the bill that clearly stipulates that no one is absolved of responsibility or accountability as a result of this legislation. Clause 14 states that “nothing in this Act affects the right of the Council or any other person to bring any proceedings against any person arising out of, or in connection with, any actions or omissions associated with matters validated by this Act.” In layman’s terms, this is not a “get out of jail free” card for those who have stuffed up and got it wrong. I give my absolute and sincere commitment to all the ratepayers, to members of this House, and to constituents of my electorate that I will leave no stone unturned in seeking the accountability that they rightfully deserve. Where that can be sheeted home, I will ensure that I do everything I can to see that occur. This bill does not in any way alter my determination to do that. Some have suggested that once the bill is passed, all will be forgotten. I can give everyone an assurance, at least on my part, that that is certainly not the case. Anyone who knows me knows that I am not someone who gives his word lightly.

The matters contained within the bill I am going to leave to members of the committee to specifically address. I want to cover off just a couple more things in my contribution. It is important to point out that this bill does not validate the $30 million decision to expand the sewerage scheme, so that is an aside from the matters that are being dealt with here. The select committee has made some very minor alterations to the bill. Most significant, it has made it clear to the commissioners that some of the penalties should be relieved. There have been some very constructive conversations occurring along these lines. The bill validates the penalties on the rates that this bill validates. Sorry—this bill validates the penalties on the rates that this bill validates. What I am trying to say here—

💬 Rt Hon Winston Peters: It validates a fraud.

Well, I will come to that, Mr Peters—I will come to that, Mr Peters. Come up north with me and we will have a discussion about it. It is nice that you are bringing yourself into the conversation now. The select committee, in its deliberations, believed that some of the penalties should be relieved, and I can see, and concur with, the views that have been shared in this respect. I have worked with the commissioners very closely to ensure that they can accommodate the requests of the select committee to address those views, and I am pleased to report that the commissioners have, in fact, done that and have provided assurances to the committee as to how they will go about it.

In terms of the further penalties—sorry, I am not going to have time; I am not going to cover that off. Other members will no doubt cover it off. In addition to the further penalties that have been applied in 2013—which the commissioners will seek to forgive—there are penalties over and above those, which would commence as at 1 January 2014, on the balance of other outstanding rates. These will also be forgiven. If people pay their rates by 30 June 2014, they will be forgiven those penalties. The commissioners will work through this process with them.

I want to turn now to the auditor. It is wrong for me to prejudge the outcome of the Auditor-General’s report or the report on the auditor, but can I say that if it is shown that the auditor has failed in its responsibilities as the overseer for these councillors, then that responsibility should be sheeted home. If that responsibility is there, then that is a responsibility that the auditor owes the ratepayers of Kaipara District to pay. So I say in this House that if that failure is proven, I will ask that the Auditor-General seek to meet with the commissioners to ensure that the cost of that failure is met. It is not a cost that should be borne by the ratepayers of the district. How can a scheme go from $11 million to $62 million without the auditor raising those concerns, and without the auditor responding to the many issues that were brought to it by many—many—across the district over a long period of time? Those questions will be answered in the days and weeks to come as the report becomes evident.

I want to support my constituents by ensuring that this bill passes before Christmas. The implications of it not doing so are significant. Although I accept that many have been angry and upset about it, it is a necessary part of the recovery of this district. I commend to all members that they support this bill and support the ratepayers of the Kaipara.

Labour is supporting the Kaipara District Council (Validation of Rates and Other Matters) Bill. As the previous speaker, Mike Sabin, commented, this has been a difficult and challenging situation, I think, for all concerned. No one likes validating legislation, for good reason.

In this case wrongs have certainly been done. In the years since 2006 the Kaipara District Council has repeatedly breached the Local Government Act and the Local Government (Rating) Act in a long list of instances that revolve round the setting of rates and in a series of failures in relation to adopting annual reports, long-term plans, and carrying out special consultative procedures under the Local Government Act. The borrowing for the ill-fated Mangawhai EcoCare Wastewater Treatment Scheme blew out, as the previous member stated, from $11 million to $62 million. The effect of that scheme and its financing has placed a massive financial burden on a small number of ratepayers, particularly those ratepayers in Mangawhai.

So what is the situation we have got? We have got years of sub-par governance in the Kaipara District, a massive debt blowout, allegations of impropriety, a rates strike by the Mangawhai Residents and Ratepayers Association, and, as a result of that, the council’s finances grinding to a halt. So what should happen, from the point of view of the Government? Well, Mike Sabin brought a bill to this House on behalf of the Kaipara District Council and the Government-installed commissioners that seeks to validate a series of unlawful acts by that council in the setting of rates.

The commissioners want those unlawful acts validated retrospectively so that the rates demands of the last few years are legalised and so that the rates strike being held by the ratepayers of Mangawhai is brought to an end, so that the commissioners can sort out the finances. That is what they want. The aggrieved ratepayers of Mangawhai have bitterly opposed this bill, and their argument—which has some merit, in my view—is that once the unlawful actions have been validated, the rates legalised, and the rates strike brought to an end, their leverage to try to achieve a broad, legitimate, and fair solution will be greatly reduced. I have a great deal of sympathy with that argument. The wider issues here, which are outside the scope of this bill, do need to be addressed—the basis on which the waste-water scheme was commissioned and financed, and the decision to expand the scheme and increase the borrowings and the levels of debt incurred.

On the other hand, the Kaipara District does need to move forward. I have concluded, on the basis of the submissions and the discussions that we had at the Local Government and Environment Committee, that there are three key elements that have to be part of a settlement of this issue. The first is that if negligence or corruption is found to have been involved in the governance of Kaipara District Council, and if the report of the Auditor-General does uncover culpability of that nature, then the wrongdoers must be held accountable. I take some assurance from the unanimous cross-party agreement at the select committee, which is included in the commentary on this bill, that we expect the Government to hold those people accountable if the Auditor-General’s reports finds wrongdoing of that nature.

The second is that the Mangawhai ratepayers group must not be punished for blowing the whistle. There were wrongdoings committed here. The financial cost to the residents is significant, and they must not be punished for blowing the whistle. That is why I am pleased to see a commitment being made by the commissioners to the select committee that there would be an amnesty for the rates penalties incurred by those people withholding their rates in protest at this situation. On the basis of those two elements, I believe, then, that there is a basis for passing this bill so that all of the ratepayers and the people of Kaipara District can move forward.

I want to read into the record the critical paragraphs that are included in the commentary that accompanies this bill, which was agreed and negotiated at the select committee. It states: “We recognise that elements of the governance of the Kaipara District Council were unsatisfactory over a period of time, and led to the problems that this bill addresses. We hope this bill, while limited in scope, will contribute to a resolution of the issues so the council and its ratepayers can move forward.”

It states: “We have given considerable thought to the question of penalties being waived that relate to rates withheld as parts of the ‘rates strike’. Notwithstanding the legal requirement for ratepayers to pay their rates, we acknowledge that the strike came about after many people from across the district had raised concerns about the activities of the council, which do not seem to have been actioned. Section 85 of the Local Government (Rating) Act 2002 stipulates that a local authority may remit rates in accordance with its rates remission policy. This approach was followed by the Kaipara District Council Commissioners for the 2011/12 rates. We are pleased that the commissioners have undertaken to extend this to include the 1 January 2013 and 1 July 2013 rates. We support this course of action and feel that it, in conjunction with the withheld rates being paid, would go some considerable way to resolving the situation so that the people of the Kaipara District as a whole may move on.”

It continues: “We note that the Controller and Auditor-General is soon to release a report on these issues. The report was not available [to the select committee] at the time of deliberation, but we were assured [by the Auditor-General’s office] that the bill contains nothing that interferes with, or compromises, the pending Controller and Auditor-General’s report, or actions that might eventuate from it. In the interests of securing a fair and legitimate settlement of the matter of the Mangawhai Community Wastewater Scheme, we trust that if the Controller and Auditor-General finds parties culpable then the Government and the council will ensure that those parties are held accountable. For the same reason, we welcome the agreement by the Kaipara District Council to implement an amnesty by way of relief of rates penalties levied on ratepayers in relation to the Mangawhai Community Wastewater Scheme from July 2012 to 1 January 2014.”

And that is the basis, I think, of the consensus hammered out by the select committee in good faith in a genuine effort to try to find a resolution, albeit imperfect, to what has been a very difficult and challenging situation in the Kaipara District. I am sure that the passage of this bill and the agreement that I have just read out will not satisfy many people, particularly the Mangawhai Residents and Ratepayers Association, but it is the job of this Parliament to make a judgment about what is in the best interests of the rule of law of all of the people in the Kaipara District, including those Mangawhai ratepayers who are so aggrieved.

I believe that if the Government meets its part of the bargain, that if the commissioners at the Kaipara District Council stand by their commitment to hold accountable anybody whom the Auditor-General finds to be culpable through negligence or corruption or other forms of wrongdoing that led to the decisions that were made around the waste-water scheme, then justice will be done in this case. In the meantime the people of the Kaipara District have to move forward. There is still going to be a significant financial burden as a legacy of the waste-water scheme, a burden that will lie on the shoulders of the residents both of Mangawhai and the broader district. I know that many of those ratepayers will feel aggrieved about that.

I believe that the committee has worked hard to try to make sense of this issue and to try to strike a balanced solution that does its best to meet the interests of all the parties involved. I want to recognise the work of Mike Sabin, the local member, who, I think, brought the bill to the House with the best intentions of trying to find a solution. I want to acknowledge the chairpersonship of Nicky Wagner and the work of all of the members of the committee in getting us to this point.

I too want to support this Kaipara District Council (Validation of Rates and Other Matters) Bill. You have heard already in the House today that politicians do not like these types of bills. We take quite a lot of convincing to support this type of legislation, but we will bite the bullet if we are convinced that when validating legislation, it is the best, maybe, of a bad set of options, but the best of a bad set, and in this case that is correct.

This bill is the culmination of many, many years of debate, many years of argument, and many years of bitter divisions in the community—many years of concern and anger that was all fuelled by poor decision-making, careless governance, and unsatisfactory behaviour, with predictable results. It was all brought to a head by the stalling of the property market in the face of the global economic crisis. So, despite our distaste for validating legislation, the Local Government and Environment Committee has unanimously supported this bill—unanimously—because we believe it is an essential part of a sensible and reasonable plan towards rectifying the very messy, very difficult financial situation that Kaipara residents and the Kaipara District Council have found themselves in.

I too want to thank Mike Sabin, the sponsor of the bill, for all his work on it. I want to thank all members of the select committee and the officials. All of us have worked extremely hard and extremely conscientiously on this bill, not only to understand the circumstances, which was a challenge in itself, but also to find a creative way to manage our way through the process and to get a workable solution for the council itself and for all the ratepayers of Kaipara.

In recognition of the concern of some ratepayers with regard to their rates strike and their passionate challenging of the council’s long-term behaviour, we have negotiated an amnesty on penalties if ratepayers remit their arrears in the next few weeks. I think that is an extremely important part of this legislation. It was something that we agonised over. It was a very difficult thing to manage through the legislative process, and I think that coming to an agreement with the commissioners outside the legislation while including that in our commentary was a good, pragmatic, sensible way of dealing with it.

After wading through all the information, reading all the submissions, and listening to submitters, both in Wellington and up in the Northland-Kaipara area, the committee was enormously aware of the complexity of the situation and the stress and anxiety of the people of Kaipara. So our job was to unravel the detail and to make sure that any rate demand, any decision, any action, or any omission that we were asked to validate could have been struck correctly, and that it was invalid only because of a technical breach. So we went through every clause with a fine-tooth comb. We looked at every irregularity, we held it up to the light and tested it, and we have only validated anything that could have been struck correctly if they got the language right. No ratepayer will pay more than they were historically invoiced for.

The validation bill really stops the financial bleeding of the Kaipara District Council and it provides certainty for everyone involved in the situation. But, more important, it provides a platform to build a solution going forward. The committee was very aware of both the social and the financial toll that the situation was taking on the Kaipara, because without this legislation, the arguments, the debates, the anxiety, and the uncertainty would have continued for the ratepayers of Kaipara. Without this legislation the Kaipara District Council was struggling under increased costs across the board, new planning requirements, interest rate risk, and the danger of losing Government roading subsidies. All in all, when we teased out those liabilities, we saw that inaction could have added at least an estimated $400,000 a year extra to the ratepayers’ bill, and that compelled us to take action.

I also want to discuss what this bill does not do. It does not limit the ability to hold any person, any organisation, or any group to account for negligence or for bad, or even corrupt, behaviour. Regardless of this bill, any person or any organisation, including the Kaipara District Council, can bring legal proceedings against anybody who deserves that.

This bill is not the end of the story, but it does close the door on uncertainty and out-of-control costs for the ratepayers. We believe that it is the most cost-effective way to move the council and the community forward. We are convinced that any other options—and, again, we held them all up to the light—would have added more cost to ratepayers, and we did not want to do that.

Of course, we are still awaiting the inquiry of the Auditor-General, and we would have liked to have been able to analyse that report before we passed the bill. But, as we have said, the costs were spiralling out of control, and we wanted to complete this legislation before Christmas to avoid another 6 months in limbo and another 6 months of extra costs for ratepayers. So we talked to the Auditor-General and we were comforted by her assurance that the bill contains nothing that interferes with or compromises the results of the Auditor-General’s report or any actions from that inquiry that might eventuate.

The bill really has shone the light on a very difficult and messy financial situation in Kaipara. It is really hard to believe that things could have got so badly out of control. We, the members of the Local Government and Environment Committee, are really looking forward to seeing the Auditor-General’s report so that we can perhaps understand how all this happened, and so we can hold to account anybody who deserves that.

I commend this bill in its second reading. It is the right thing to do for Kaipara. It will stop the bleeding of costs for ratepayers and will provide a platform for the whole community to move forward. Thank you.

Kia ora, Mr Assistant Speaker. Thank you very much for the opportunity to take a call in the second reading of the Kaipara District Council (Validation of Rates and Other Matters) Bill. I have been a bit of a bit player in this whole sorry saga, but, obviously, I have spent quite a bit of time with the people who are most affected by the provisions of this bill, and they are the ratepayers of Kaipara. Not all of them, of course, but some of them have been to see me, along with the commissioner and others. I have been, along with my colleagues, part of many meetings where we listened, and tried to unravel and understand a very difficult situation, as the former speaker, Nicky Wagner, just described.

I have come to the conclusion that the Local Government and Environment Committee, having read the report and having listened to the members speaking, has done the best it could possibly do in a really, really difficult, messy, longstanding, and bitter situation. I think it is probably one of the worst bills that any member in my time in the House has had to bring to and justify at the first reading. To that end, I want to acknowledge Mike Sabin. He did what he had to do. As I said, I think that the committee has worked very hard to come up with a solution, but it will not please everybody. There will still be a lot of bitterness and anger about this, but what else do you do? You have to try to find a compromise, so I support the bill for that reason.

The bill validates a number of illegal acts carried out when the Kaipara District Council set rates under the Local Government (Rating) Act 2002 in relation to the council’s long-term plan and the use of the special consultative procedure. What that means is that any rates purportedly set out under the rating Act can be validated and that any penalties payable on outstanding rates can also be validated. That is what it means. The validation relates to the setting and assessing of rates in the financial years 2006-07 to 2011-12, the 2010-11 annual report of the council, a number of irregularities relating to its 2009-19 and 2012-22 long-term plans, and the use of the special consultative procedure regarding the 2012-22 long-term plan.

Other people have talked about the background to this bill, and I intend to do that as well because I think it is important that it is on the record for people to see, and for those who are directly affected by this here. The background to this bill is that the Kaipara District Council entered into loans to pay for a waste-water treatment plant at Mangawhai that was worth a lot less than what was paid for it. In doing so, the council not only made some really bad decisions but incurred an $80 million debt. That debt has now been saddled on the ratepayers of Kaipara District Council, and particularly on the ratepayers of Mangawhai, who are now paying up to three times as much a year for their rates.

You can understand why they are angry. They are right to be so. The council has created a horrible mess through incompetence, mismanagement, and illegal actions. I think that citizens deserve better than that from their elected councils. I completely understand and concur with the organisation that they have put together to try to find solutions to this, which does not mean bringing a bill like this to validate the poor decision-making of the council. The Kaipara ratepayers, especially those of Mangawhai, are being asked to repay the loans, which were improperly entered into, and which were much larger than what was consulted on. They are being asked to pay substantially increased rates because of that. The Mangawhai Residents and Ratepayers Association has vigorously opposed that. It has challenged the council, it has challenged the illegal and unlawful actions, it has organised, and it opposes this bill as well. It is the one that has entered into a rates strike. At the same time—

💬 Mike Sabin: But they do concede that it would be necessary.

What was that?

💬 Mike Sabin: They do concede that it would be necessary at some time.

Yes. But then there are many other ratepayers in Kaipara who continue to pay their rates to the council, and the council, with all its problems in the past, is now delivering services that one should expect of a council.

Commissioners were appointed in September 2012 after increasing pressure from the community and questions about finances. I have to say that it seemed to take a long time for those commissioners to be appointed, and perhaps we could have headed off some of these problems a bit earlier. Anyway, the commissioners remain in place today, and they have sought the help of this House so they can do the job that they have been appointed to do by the Government.

I do not envy the select committee or the local member, Mike Sabin, in dealing with this bill. I do want to repeat that I believe that all members who have been involved in this at all stages, and on the select committee, have acted with integrity and good intent to do the best they can for Kaipara District and the ratepayers. I know that they have taken this matter seriously. The members from the Labour Party on the select committee have reported back to our caucus on numerous occasions. We have had long discussions about this bill. There has been a lot of concern in our caucus about this and about how we will resolve this problem.

I think we are all clear that none of us wants to see retrospective legislation. I think it is abhorrent that this Parliament is being asked to make illegalities legal, especially considering that they arise from the incompetence and, possibly, gross mismanagement of this particular council. I want to repeat the message that I think came from other members, in so far as that councils around New Zealand should be on notice that this process is not an easy “get out of jail free” clause to get their stuff-ups rectified. Parliament’s tolerance for validation of this kind is extremely limited. But this is “between a rock and a hard place” stuff. Of course, the problem that you are faced with is who is going to pay this debt. If it is not the ratepayers of the Kaipara District Council, then it is the taxpayers of New Zealand. Neither is at fault, but how do you resolve it?

Turning to the report of the select committee, that select committee has reported back unanimously, and it did hear a number of submissions and travel to Maungatūroto. It has unanimously recommended that the bill be passed with amendments. It has also commented on some of the wider issues surrounding the bill and the need for it, and I think it is good that that is in the report and that it is written into the record of the debate on this bill. I share the select committee’s hope that this bill will contribute to a resolution of the issues—these longstanding issues—so the council and its ratepayers can move forward.

I also appreciate that there is an additional clause in the bill, which Mike Sabin referred to—clause 14—so that any person may bring proceedings against any person arising out of, or in connection with, any actions or omissions associated with matters validated by this legislation. I think that is very, very important, and will be of comfort to some who want to see those persons held to account.

I am also pleased that there is going to be an amnesty. There was an agreement with the Kaipara District Council. As I say, a lot of people will still not be happy, but it is progress.

I also think that the message from the select committee is that if the Controller and Auditor-General finds parties culpable in her report, then we—this Parliament, Labour, and all the members of this House—expect the Government and the council to ensure that those parties are held accountable.

Finally, I want to acknowledge the residents and ratepayers of Kaipara District, particularly the Mangawhai Residents and Ratepayers Association, which has been very outspoken. I know they have tried to find constructive solutions, and it has been very, very difficult for them. I believe that the ratepayers of Kaipara have been through an undeservedly frustrating and difficult few years dealing with this problem. They deserve a council that does better by them than the one that they have had, and I hope that this bill is the basis for moving forward so that they can get the kind of support they deserve through their local council.

Tēnā koe, Mr Assistant Speaker. I am not pleased, like other colleagues, that Parliament is having to consider retrospective legislation, but I am pleased to take a call on the Kaipara District Council (Validation of Rates and Other Matters) Bill. New Zealand’s 78 councils manage around $98 million worth of public assets, most of these being infrastructure assets that enable the provision of essential public services like stormwater, waste water, and drinking water. For the most part, councils do this work well on behalf of their communities, but Kaipara is a horrendous example of what happens when it goes wrong. The community is being landed with a very expensive waste-water scheme, which costs $62 million instead of the $17 million that was originally estimated. The former council made a series of disastrous decisions and a series of rating resolutions that failed to comply with the Local Government Act. This bill seeks to validate those resolutions and the $17.3 million of rates that were improperly set.

It is very disappointing that we are debating this bill before receiving the report of the Auditor-General and the inquiry into the waste-water scheme. That report has been delayed until early December. But, as others have said, the Auditor-General has reviewed the bill and advised the Local Government and Environment Committee that the bill contains nothing that interferes with or compromises its pending report or any actions that might eventuate from it. If the report does identify shortcomings in the work of Audit New Zealand in relation to the council’s financial statements, then some compensation from Audit New Zealand may well be in order. Similarly, with the contracts that were signed by the council, the commissioners need to apply the same assiduous look that they applied to the council’s tangled finances to the contracts and the opportunities for penalties being paid by contractors for cost overruns and budget blowouts in the scheme. If the Auditor-General’s report indicates that legal action should be taken against past decision makers at the council or key advisers at the council, then the Government agencies need to take that action and pursue those proceedings with a lot of energy and effort.

We are very pleased that the select committee decided to amend clause 14 of the bill, which makes it very clear that the bill does not remove the right of anyone—originally it was only the right of the council—to bring proceedings against anyone connected with any acts or omissions associated with the matters validated by the bill. That is one of the amendments made by the select committee. We acknowledge the work of the Mangawhai Residents and Ratepayers Association and its advocacy because that saw the clause being included in the bill in the first place.

The Green Party is reluctantly supporting this bill because it appears to be the only way that Kaipara’s financial problems can be resolved and that the council can be put on a sound footing for the future. The Local Government and Environment Committee has sweated blood over the bill. I pay tribute to the work of Mike Sabin and the committee chair, Nicky Wagner. I pay tribute to all members of the committee, the commissioners for the advice that they provided, and the 150 people who made submissions and those who presented to the committee. The hearing day in the Maungatūroto Country Club was one of the more memorable hearing days. Even though people will not be satisfied with the report-back version of the bill, we have considered those submissions and the issues they raised very, very carefully.

One of the reasons the Green Party is supporting the bill is the evidence that not passing it would significantly increase the cost to the wider Kaipara community. It has a very small rating base of 14,000 properties. The evidence that the commissioners provided was that the longer the bill takes to become law, the larger the amount of rates that are being withheld and the larger the council’s deficit funding problem. At the end of June this year, the amount of rates being withheld totalled $3.85 million, or about 12.5 percent of the rates set. That has created a significant funding shortfall, which has meant that some capital expenditure has had to be deferred. If it continues, there will likely be cuts to services. The commissioners estimated that not passing the bill means that the cost of delay would total about $530,000 a month and that that is likely to lead to cuts in services because of the cost of refinancing the debt and also amending the long-term plan.

What we are debating today will not be popular, but I would like to pay tribute to the work of the Mangawhai Residents and Ratepayers Association because it blew the whistle on what was happening at Kaipara. It did that over many years, and it was not until relatively recently that Government agencies started to listen. We heard repeatedly from submitters that people who were withholding their rates were law-abiding citizens and that they normally took payment of rates very seriously, but the fact that they were so frustrated by the failure of authorities to act on the recognised problems at Kaipara led to their frustration and led to the withholding of rates. So the agreement that the select committee negotiated through Mike Sabin with the commissioners—that they would agree to waiving the penalties—is just a small consolation, I guess, and a token acknowledgment of the work of the whistleblowers, and it acknowledges that they should not have to pay penalties because of their withholding of rates to draw attention to the problem. But also the fact that people need to pay rates recognises that they are getting their services, as Darien Fenton noted, and that the council has continued to provide those services to everyone in the community.

We also support the bill because of the evidence that the council stood to lose its share of funding from Transit New Zealand for the maintenance of local roads. Again, if the problem continues, then there is a wider cost that the whole community bears. So it has been a pragmatic decision that if we want to get Kaipara District Council’s financial problems on a much sounder footing, then the issue needs to be resolved, and the bill, by validating those improper resolutions in the past, is a way to do that.

Opposition parties certainly made the case that the Government should provide some assistance to Kaipara to reduce the impact on ratepayers of having to repay that debt. That was rejected on the basis that the Government did not want to set a precedent for other local authorities, but we call on the Government to reconsider it once the Auditor-General’s report is out, and to consider whether some assistance could be in the form of a suspensory loan to the council.

The Green Party also really seriously considered the submissions that proposed that rather than ratepayers and the local community bearing the full cost of the council’s malfeasance, the banks should take a bit of a haircut because they failed to do due diligence in their lending to the Kaipara District Council. The response here was that this would mean that interest rates for council borrowing across New Zealand would increase significantly if banks regarded local authorities as a less than secure lending proposition. What may result in a fairer solution in Kaipara would potentially cause inequity over a larger area. But it still rankles that the burden of repaying this debt falls on the community of Kaipara, which was not responsible for incurring the debt, when the council did not abide by the provisions in the Local Government Act. We are reluctantly supporting the bill because it does seem to be the only way forward to put the Kaipara District Council on a sounder financial footing.

I too rise in support of the second reading of the Kaipara District Council (Validation of Rates and Other Matters) Bill. The bill is sponsored by Northland MP, and my colleague and neighbour, Mike Sabin. Members will be aware that his electorate is north of me, west of me, and south of me, and my back is to the sea. I am a little like Israel, when it comes to Mike Sabin. [Interruption] He is nothing like Palestine. He is an excellent Northland member of Parliament. In presenting this bill to the House he took very, very seriously the matters occurring in Kaipara and the spending by the district council over recent years, the concerns not only of ratepayers in Mangawhai but also of ratepayers right throughout that district, many of whom—not just those from Mangawhai—worked hard on the resolution that you see in this legislation.

I do know that Mike Sabin, before agreeing to support this particular piece of work, said that he would not support this bill if it sought to validate matters that could not have been done within the law in the first place, or if it would impose further costs on those who had, in good faith, paid their rates over the years. He was concerned about that. He also said at that time, and has repeated it, that he would not have validated any matter that was born of any criminal actions. Mike Sabin was clear about that. I do know that my colleague also made it clear to the commissioners, to ratepayers, and to this House that this bill does not absolve those responsible for the failures that have led to the need for this bill. “I would not support it if it did.”, Mike Sabin said. He has responsibly brought this bill to the House and it has gone to the Local Government and Environment Committee, and we have got support from across the House, from all members of Parliament—

💬 Rt Hon Winston Peters: No, you haven’t.

—who matter; from all members of Parliament who matter.

The bill will support 124,000 citizens in Kaipara. It will bring certainty and closure to a number of irregularities over the past 7 years. The district council acknowledges that a number of irregularities occurred in the way that it set the rates. Certainly, the select committee members noted that and this bill is about fixing those very irregularities. The bill will mean that ratepayers will be liable for the rates that they were invoiced for, and no one will pay more rates than they were historically invoiced for. So it is a good solution.

The select committee did make some changes. The bill authorises that both rates and penalties added to the rates be recovered, as is normal for local government validation legislation. The select committee recommends amending clause 6 to ensure that penalties can be charged only if they would have been added to the rates validated under the bill. Some committee members felt that some of the penalties should be remitted. The commissioners appointed at the request of the council in 2012 have agreed to take a proposal to council, in which certain penalties will be forgiven when the bill is enacted this calendar year. It is very important to acknowledge the work of those commissioners in supporting the select committee, keeping us informed, and being flexible enough to change their views where they could see that a compromise, imperfect as it was, needed to be made. Penalties applied in the 2013 calendar year, as well as penalties due to be applied on 1 January 2014, will be remitted now, under that proposal. We thank the commissioners for that, and ultimately, of course, thank the ratepayers in going with this.

In the provisions, in more detail, it is worth noting that in terms of the rates the bill validates the following: it validates specified rates set either inconsistently with the council’s funding impact statement or not allowed for under the Local Government (Rating) Act, it treats all money received by the council in payment of the specified rates or penalties added to those rates as having been lawfully paid, and it authorises the council to recover any part of the unspecified rates and any penalties added to those rates that remain unpaid. In terms of the issue of the penalties, we have worked hard with the chair of the commissioners to find a way to accommodate those concerns. I know that Mike Sabin is pleased, as we all are, to report that we secured the commissioners’ commitment to take to council a proposal to forgive specified penalties that had already been applied in rates notices when this bill is enacted in that year. Under the Local Government (Rating) Act 2002 a local authority is able to apply further penalties on prior years’ arrears that are outstanding on 1 July and 1 January each year. That is, well, not common practice, but normal practice in many situations. It is these further penalties that are being applied in the 2013 calendar year that the commissioners will seek to forgive.

In addition to this there is a further penalty, due to be applied on 1 January 2014, on balances outstanding against rates accounts. Should the bill be enacted into law this calendar year, the commissioners intend to change council policy to enable the remittance of this penalty, on the condition that rates accounts are brought up to date by 30 June 2014. I believe that rates strikers long ago made their point, I know that Mike Sabin believes that rates strikers long ago made their point, and certainly the committee accepted the point of rates strikers. It has been very hard on fellow ratepayers, though, that the rates strikers have continued to withhold their rates while having use of the services that others, right across the district, have been paying for. So although other ratepayers throughout the district have paid their rates, the rates strikers have not but have enjoyed the services paid for by others. Relieving these rates must be seen in this light, and I commend the ratepayers who have continued to pay their rates, despite their concerns and lack of faith in their council over the years. I want to thank them for that, and I know that Mike Sabin wants to thank them for that. A compromise has been found, and I want to commend the commissioners for finding a way to meet the concerns of the select committee on these penalties.

It is true that the Kaipara District Council has had a few difficult years. As well as the rating irregularities, the council presided over the controversial Mangawhai sewerage scheme and a considerable increase in debt. This bill has not stopped the proper scrutiny of these decisions; nor does it absolve anyone of responsibility and culpability. It also should be noted that the Office of the Auditor-General has an inquiry into the Mangawhai EcoCare Wastewater Treatment Scheme. It is an independent inquiry of the Auditor-General, and the commissioners’ inquiry into matters aside from that, including the actions of the former chief executive, is also ongoing. As a select committee we were aware of these other inquiries by other jurisdictions, which were independent of both us and the council. We appreciate their cooperation in keeping us informed on their progress and on what they felt might come out of their investigations. This bill does not impinge on any of those inquiries under way.

The bill is about fixing some of the irregularities so that the council can continue to function and so that services can continue to be provided for the ratepayers of the Kaipara District. Without validating legislation, the council would need to refund all the rates that were set incorrectly and set new rates to recover the money, work its way through a complex process of resetting rates for each year since 2006, or leave the status of the rates uncertain and open to legal challenge. That is something that would be unacceptable for the majority of those in the Kaipara District who want to move on. Each of these options is unworkable and would leave the council in an untenable financial position. That is why I support this legislation. Members of this House and on the committee support this legislation because they see that, although imperfect, it is a pragmatic and practical way through.

I take a call on behalf of New Zealand First on the Kaipara District Council (Validation of Rates and Other Matters) Bill. Communities all around New Zealand and, in particular, on our coastline have been experiencing over the last decade or so increasing demands for the treatment of waste water and stormwater. Communities are up for significant amounts of money to cover the costs of upgrading to reduce the spillage into our waterways and into our harbours. As a result, the Mangawhai scheme is an example of that. The Kaipara District Council was required, in conjunction with the Northland Regional Council, to address how it would curtail the problems from runoff from septic tank systems and small communal systems in the Mangawhai area.

During the late 1990s and early 2000s a scheme was proposed for Mangawhai to put in a central waste-water scheme. During that period it was developed so that it would provide for 21 kilometres of sewers, 18 kilometres of property drains, 15 pumping stations, 6 kilometres of rising mains, a new waste-water treatment plant, and a 110,000 cubic metre storage dam—a sizable scheme. It was designed to cope with a population of 3,000 and, in the summer, a peak of up to 8,200 people who move up on to that Northland coast. During that period, in the mid-2000s, the people of Mangawhai and the ratepayers of the Kaipara District were consulted with on the basis of that scheme to the point of a $31 million project.

As a result of that consultation, the council determined in August of 2005 that it would proceed with the project, and it negotiated a facility with ABN AMRO Bank to the tune of $31 million. In October of that year it appointed a company by the name of Earthtech Contractors to design, construct, and operate the EcoCare facilities, and, in so doing, it commenced to draw down the loans. In May of 2006, some 9 months later, Kaipara District Council appointed Beca Group to manage the implementation of EcoCare. Beca Group is a well-known consulting firm based in Auckland, which provides to local authorities all over New Zealand. It was there to oversee the implementation because the company, Earthtech Contractors, was Melbourne-based and it was seen by the council to be preferable to have a sizable local consultancy firm to oversee it.

This is where it starts getting a bit hazy. Within 1 year, in December 2007, the project deed was amended and the ABN AMRO Bank loan facility was increased to $53 million. The people had been consulted on a loan of up to $31 million, and suddenly the council took out a facility with ABN AMRO Bank for $53 million. Subsequent to that, the council then actually borrowed $58 million to fund the project. During that whole period of time there was no consultation with the people of Mangawhai or the people of the Kaipara District, but that council took on huge increased debts to cover it. This was a sign of extremely poor governance by the council, by the mayor, by the deputy mayor, and by the management—in particular, by the chief executive officer of the Kaipara District Council, who had been a chief executive officer there for some 18 years.

It was concerning. During the Local Government and Environment Committee hearings I questioned some of the attendees, and I asked a councillor from the Kaipara District who attended and said that surely, in the quarterly financial reviews that councils are provided, with and councillors should be provided with, it would have shown a rocketing amount of funding going into the scheme and borrowing going into the scheme. I was appalled to be told that the councillors of the Kaipara District Council were not provided with such quarterly financial reviews, and, in fact, the councillor had been denied that information by the chief executive officer and by the council.

I give an example. When the North Shore City Council built a $110 million outfall pipe on the North Shore while I was the Mayor of North Shore, it was originally budgeted at just over $110 million. When we came to the commencement of construction, it was signed off at being $116 million. When it was finally completed, it came in at just close to $120 million. This was a massive, 6 kilometre, 2.8 metre diameter pipe—a huge project—but we managed to contain it. During that whole project, our council, our councillors, and the management received regular reviews on how that project was going and how the costings were going. In this case, with Kaipara, that did not happen and it ballooned out. During that same period, the Audit Office gave its annual audit of the Kaipara District Council. I am also appalled that the Audit Office, during that whole period of time with its annual reviews, did not pick up that this was an absolutely ballooning disaster waiting to happen.

During that period of time, the ratepayers themselves started sounding the alarm. I give full credit to all those ratepayers who did so, including the Mangawhai Residents and Ratepayers Association. They started raising the alarm bells, and it fell on deaf ears. They were told to go away. They were ignored, and yet they were on to something.

During that period of time, ABN AMRO Bank was taken over by the Royal Bank of Scotland, which in turn went under and was sold to Lloyds Bank. Lloyds Bank then passed on the loans to National Bank, and National Bank was subsequently merged with ANZ. I am advised that those book value loans today are nothing like the book value loans that were taken originally by ABN AMRO Bank, and, in fact, ANZ is now sitting on those loans at a considerably written-down value. In that respect, therefore, the ratepayers of Mangawhai and the Kaipara District are still being required to repay those sizable loans at the full book value rate. However, it would appear that the New Zealand bankers are making a healthy margin out of this. In that respect, we are calling on the Government to intervene and have proper talks with ANZ to get this back on track and to see how much it can discount these loans by in order to ensure that the ratepayers themselves are not left out of pocket by paying for something that ANZ actually did not end up taking up.

At the same time there needs to be a review in terms of some of the people involved—the likes of the contractors, the likes of Earthtech Contractors, the likes of Beca Group, the likes of the chief executive officer for 18 years of the Kaipara District Council, and the likes of the mayor and the deputy mayor, who had a big involvement in this whole thing. It all needs to be investigated and they need to be held to account. We are very pleased that, as part of this bill, there is an allowance for people to go after them and to sue those who have been found to be negligent and, in fact, to ascertain whether there have been any unlawful actions on the parts of some of those people. I was most concerned that one clause in the bill, clause 3(g)—which I requested be removed—said that this would also “validate any other actions or omissions of the Council relating to the financial years 2006/2007 to 2012/2013 (inclusive).” That basically gave carte blanche validation to this whole thing in terms of any other omissions that the Kaipara District Council had undertaken. I was pleased that that was removed from the bill.

In closing, I would just like to say: all credit to the ratepayers. A legal opinion has come through to me that said: “The illegalities in entering the loans … are not mere technicalities or formalities. It goes to the heart of local government’s obligation to consult ratepayers before entering into large financial commitments and whether rates can be set to cover illegal loans. … The wider solution should involve Government providing leadership to broker a deal with the [Kaipara District Council] … and the lender banks to fill the financial gap faced by the [Kaipara District Council.] … The bill retrospectively validates illegally set rates …”—and is not right.

I do commend the work of the commissioners, who have worked hard on this. They are in an invidious situation, in being basically given a hospital pass to try to sort this out. However, despite their work to try to do this, it cannot belie the fact that people have acted in an appalling manner in terms of the governance of this council, in terms of the management of this council, and in terms of those contracted to this council.

New Zealand First and the New Zealand First caucus cannot support this bill. We wish that Parliament would ensure that those who are culpable in this matter are brought to account.

I am disappointed that New Zealand First members cannot find themselves being able to support this Kaipara District Council (Validation of Rates and Other Matters) Bill, because the select committee has worked extremely hard, as has the member representing New Zealand First, in trying to find a way through a deplorable situation in Kaipara. I am disappointed that New Zealand First members have taken this view because the question then becomes: “Well, if they can’t support this solution, what solution can they support?”. What needs to happen—

💬 Rt Hon Winston Peters: Well, how about asking the banks whether they did due diligence?

And Winston Peters, who does not know a thing about the bill, who has not read the bill, who does not understand the issues, and who clearly has not been briefed by the New Zealand First MP who does sit on the committee, is going back to his normal fall-back position of seeing a conspiracy under a rock somewhere. Well, that might be politically convenient and politically expedient, but actually his member, Andrew Little—

💬 Maggie Barry: Andrew Williams.

—Andrew Williams, thank you, colleague—gave Andrew Williams—

💬 Hon Member: Practically twins.

Yes, they are practically twins, but unlike the Labour member, Andrew Williams does not seem to have been able to convince his leader that if the House does not support this bill, then what? I would like Winston Peters to get to his feet in this debate and explain to the House just why it is that although his colleague has sat diligently—

💬 Rt Hon Winston Peters: I raise a point of order, Mr Speaker. If the member is going to throw out that challenge, I am asking her to yield now and I will give her my answer.

The ASSISTANT SPEAKER (Lindsay Tisch): No, no—

💬 Rt Hon Winston Peters: Oh, she does not want an answer then?

The ASSISTANT SPEAKER (Lindsay Tisch): No, I am ruling.

💬 Rt Hon Winston Peters: Give her a chance.

The ASSISTANT SPEAKER (Lindsay Tisch): The member will sit. I am calling Jacqui Dean to continue her speech.

Thank you, Mr Assistant Speaker. The problem is that Winston Peters can retreat to his fall-back position, which is to see a great conspiracy somewhere, to find demons that he think will advantage him in the sad ending of his political career—and it is the demise of New Zealand First—but sitting directly behind him is a member, a former mayor, who has, in fact, worked very hard on this bill with the Local Government and Environment Committee to the benefit of the people of Kaipara.

This bill is not here to benefit Winston Peters. The bill that we are discussing today is to get over a problem that the ratepayers of the Kaipara District Council are facing. That is fine. We can demonise and we can blame the chief executive and the decision-making process of the elected members and of the chief executive and anyone else who is involved. We can do that, but does it actually fix the problem? His member can see that. Winston Peters’ own colleague, who is sitting right behind him, Andrew Williams, can see that and, no doubt, tried to brief his leader, but it has clearly fallen upon the ears of somebody who has not even read the bill, who has absolutely no liking for the processes of local government, and so who is now taking this position against the interests of the ratepayers and the older folk.

Just remember who those ratepayers are. They are the older folk, the older residents of the Kaipara District who are living on a fixed income, who are no doubt SuperGold cardholders, and who are looking to this Parliament for direction. They can look everywhere else around this House, but they cannot look at New Zealand First. So those very constituents whom Winston Peters seeks to please are the very ones who would be suffering because that party cannot find it in their hearts—well, it clearly does not understand the bill, but Winston Peters cannot find it in his heart—to look past his own political self-interest and to understand that this validation bill brought to the House by Mike Sabin is not about Winston Peters and politics; actually, it is about validating some pretty poor decision-making on behalf of the Kaipara District Council.

I want to commend Mike Sabin, who was put in the invidious position of being asked to sponsor this bill, because it is a bill with no clear remedy at first. There are a number of aspects to the situation in Kaipara and, yes, there was a rates revolt by a number of ratepayers. I have to acknowledge that the rates revolt came about through the sheer frustration of the ratepayers of Kaipara who were unable to get their point across to their local authority. I think there is a lesson in there as well for the future health of the Kaipara District Council, and, indeed, all district councils going forward, and that is to listen to its ratepayers. It might not like hearing what it is being told and in this case, no, it should not have liked what it was being told, but the rates strikers, if nothing else, have raised attention so that the local member, Mike Sabin, has brought this matter to the House for the House’s consideration.

I also want to congratulate, and pay tribute to, the 13,000 ratepayers who continued to pay their rates. I want to commend them for the support of the commissioners, because just over the fence, perhaps, was a neighbour who was a rates striker and who was still receiving services provided by the local authority through these difficult times, but they were not paying their contribution. Part of this validation will remedy that, and I think that is a good provision in the bill. There is a lot of upset, there is a lot of anger, and there is a lot of frustration around this bill on behalf of the ratepayers because they have not been well served by their elected members and the chief executives.

The local bill that we are dealing with in the House will pass before Christmas, which is to be commended, and I want to thank the House for its cooperation in this. It is only part of a number of processes that are under way to help achieve putting right—and it is putting right—bad mistakes that were made in Kaipara.

Since 2012 there has been quite a significant range of interventions. There have been investigations, and actions have been initiated, so I am just going to run through those. There was the implementation of a Government-appointed review team, and it was its subsequent report that led to the resignation of the previous council. That is no small event in the life of a local authority and, as you can imagine, that is the kind of event that is going to take many years and much hard work to overcome. Then there followed the appointment of a team of commissioners and, again, I want to commend the commissioners for their work. Again, I want to commend those ratepayers who have worked with the commissioners and who supported them through an incredibly divisive process.

There then was an investigation led by the Office of the Auditor-General into the Mangawhai EcoCare Wastewater Treatment Scheme and all matters related to that. There was also an independent inquiry into the council auditor at the time, Audit New Zealand. There were also inquiries from both the police and also the Serious Fraud Office with a view to establishing criminal investigations, if applicable. We do not know if that is applicable just yet. Those investigations are under way, but to date there has been insufficient evidence identified to warrant investigations. There have also been inquiries by the commissioners into actions within the council, including those of the former chief executive officer.

In the third reading speech I will go into some more detail about what is contained in the bill, but I just want to finish my contribution today by again condemning New Zealand First members for not being able to see past the politics—the shabby politics—that they see as being what matters under this bill. I utterly condemn—and why should we be surprised though—Winston Peters taking this position, when directly behind him sits a good member of Parliament, a former mayor, who understands completely—

💬 Hon Member: He quite likes that.

Well, OK, I am saying “good”. He understands completely that proper processes are absolutely critical in local authorities. This bill is putting right those. It is about the ratepayers of the Kaipara District. It is not about the shabby politics, the populist politics of New Zealand First. Thank you.

You see, what happened there was that a rubber-stamp expert from the National Party got up, made a challenge, and when asked to yield would not do so. There is the member from Waitaki, who has been in Parliament for 5 minutes and knows nothing about the legal circumstances behind this legislation, the Kaipara District Council (Validation of Rates and Other Matters) Bill; knows nothing about the transactions that belie the truth in this matter; knows nothing about the people who put together the scheme; knows nothing about the engineers; and knows nothing about who jacked it all up. She needs to explain to the people of Kaipara—all the people—and of Dargaville, the far north, and Whangarei, because if there is to be a unitary authority, sooner or later this massive debt will visit them, and they will not be able to cauterise it in the way that this new young backbench member sponsoring the bill, Mike Sabin, says. Those members do not know what they are talking about.

Can I ask the member this—can I ask the member this. When the Bank of Scotland went down—

💬 Jacqui Dean: What are you going to do?

Listen. When the Bank of Scotland went down—I am going to ask this expert member from Timaru—what was the size of the encumbrance? She does not know. See? There she is. I asked her. She was on the Local Government and Environment Committee, apparently. I asked her: when the Bank of Scotland went belly up, what was its encumbrance? She does not know. She cannot explain it. I know what it is now. It is heading past $82 million. She cannot explain that. What, for example, was the rebate that the ANZ bank—

💬 Mike Sabin: Why doesn’t the member explain that if he cares so much about Northland, he could have taken 1 minute to come and talk to me?

No, Mr Sabin, you had countless opportunities to explain to the country what the bill is all about. Mr Sabin had countless—

💬 Jacqui Dean: I raise a point of order, Mr Speaker. The member who has got to his feet does not seem to understand that this bill is called the Kaipara District Council bill.

The ASSISTANT SPEAKER (Lindsay Tisch): No, that is not a point of order. That is a debating point.

Unfortunately for that naive member, I have lived in Northland. My roots go back a thousand years, not just a few decades. They go back a thousand years, and it is arrogance of the worst sort that up she jumps, from Waitaki—she never even made the first European boat—and she challenges my background in the north.

💬 Mike Sabin: Why not give the sponsoring member 1 minute to talk about it, if he goes back a thousand years?

Mr Sabin, of course, is so excited that he is not prepared to hear any debate at all. Mr Sabin is in charge of this bill. He knows that he has lumbered his people with an absolute lemon—a total lemon. Mr Sabin, what do you know about business?

💬 Mike Sabin: Explain why that is.

Explain to me why the ANZ bank—

💬 Mike Sabin: Explain why it’s an absolute lemon.

No, listen—just answer some questions. I have got the answers for you, if you will but shut up and listen. If you want to learn something, just keep quiet. Mr Sabin is hallucinating here and frothing up and lathering up because he knows how embarrassing this is up north.

Let me ask you this. The ANZ bank heard from the receivers of the Bank of Scotland that it had this encumbrance, and the receivers were prepared to sell it. Did the ANZ bank do any due diligence? The ANZ bank, having got this encumbrance for a 40 percent discount, still has the same debt but discounted by 40 percent. That is massive. You would think it would have done its due diligence, would you not? And you would think also that the BNZ, which helped share this debt, also did its due diligence.

💬 Mike Sabin: Talk to the House about protected transactions.

I do not have to talk to turkeys like you to understand business. I am the man who disclosed the wine box. I am the man who exposed the BNZ. I am the man who exposed the BNZ, the wine box—I know how business works. What is your record?

💬 Mike Sabin: How do protected transactions work?

See? There he goes.

💬 Denis O’Rourke: He hasn’t got a record.

He has got no record at all. Apart from getting the odd hoon in downtown Dargaville as a policeman, he has got no record at all. I am talking about serious business transactions that are required to be explained to the people of Kaipara. You know, here was an operation to be built for the good citizens of Mangawhai. You know, I have never seen anything anywhere in the world like what the council put up to be paid for by the people of Mangawhai and Kaipara. This is a B-O-O-T, which took only 6 years from start to finish.

💬 Hon Michael Woodhouse: A what?

It is a build—oh, do you know what he said, the smart man from Dunedin? The man is a new Minister and he does not know what a BOOT is. Well, shortly next year he will get the boot, and he will find out what its other ramifications are. BOOT is a build-own-operate-transfer. Oh, they built it, but they never got to own it properly and they never got to operate it properly, but what they did manage to do—[Interruption]—I say for the screaming lunatic from Kaipara, was to transfer it to the ratepayers of Kaipara District Council.

See, I know when someone is nervous. I know when someone is nervous. Me thinks he doth protest too much. He doth protest too ignorantly. He doth protest far too ignorantly, because if he was confident and relaxed about his colleagues’ views, he would not get so hysterical. But today he is hearing some facts he did not know. Unlike him, my job is not to organise a conspiracy against the ratepayers or the taxpayers. My job is to uncover it, and we have and we will. I want to know why you are lumbering all the citizens of the north—because if there is a unified council, they will all wear it in time. You can forget the idea of a unified council, because Whangarei is never going to wear the far north, the mid-north, and anything else and pay for it—not now. Let me tell you, Mr Sabin, what your job is. Your job is not to flash around town. Your job is not to flash around the north as a one-trick pony.

💬 Mike Sabin: One person I won’t listen to about how to do my job is that person there—Winston Peters.

I raise a point of order, Mr Speaker. I do not mind interjections. You know me; I can handle them. But I do think two speeches at the same time should not be allowed. Could you tell him—

The ASSISTANT SPEAKER (Lindsay Tisch): No.

💬 Tim Macindoe: Point of order—

The CHAIRPERSON (Lindsay Tisch): No, the member will sit. I am listening very closely. It is a robust debate. There are some interjections across the floor. I am listening very carefully. As long as I can hear the member, that is fine.

Well, that is by far the most important thing. I can tell you that only by our gracious providence is the rest of the country hearing what I have got to say, because Mr Sabin has gone off his head today. He is so embarrassed to be walking in here and sponsoring a bill that, when you look at it with close examination and having been properly briefed and seriously briefed, as I have been, by far better minds than his—

💬 Tim Macindoe: The member doesn’t know what’s in the bill.

—and far better brains than that man, who used to teach at St Peter’s, ever had. All he might know about is the seventh form; he knows nothing about business. That is why he lines up like the rubber-stamp merchants they all are—all these backbenchers—and whenever the Minister says something they say “Yes, sir. Yes, sir. Three bags full. Yes, sir.”

💬 Maggie Barry: Oh, and your lot don’t? “Jump how high, Winston?”.

Here comes the No. 1 rubber-stamp merchant with the most uncultured voice I have ever heard. She will never be a Minister.

💬 Maggie Barry: “Yap, yap!”

No, “Yap, yap!” is your speciality.

💬 Tim Macindoe: I raise a point of order, Mr Speaker. This rant has been nothing but abusive. It is totally irrelevant, and I ask you to bring the member to relevance to the bill, which I do not think he has read. He certainly does not understand it.

The ASSISTANT SPEAKER (Lindsay Tisch): Order! I hear what the member is saying. I just ask that the member be very mindful about personal attacks on people. A member can take objection to what is being said, so keep it seemly. It is a robust debate. I am listening very carefully to the content. We have got 2 minutes remaining.

You are precisely right. You see, the last member who got up and spoke spent all her time abusing a member of Parliament—namely, me—and now she is getting a reply based on facts and substance and she cannot handle it, and nor can her colleagues. [Interruption] Can you answer me this question. Why for 5 years were the accounts never tagged—why for 5 years were the accounts never tagged? Why do we need a full-scale inquiry about that? For goodness’ sake! You are a select committee. Get the auditors in and ask them: “How do you possibly explain yourselves? Because frankly, if you can’t, you wear part of this debt.”

The ASSISTANT SPEAKER (Lindsay Tisch): Order! I am not part of this debate.

Well, I—

The ASSISTANT SPEAKER (Lindsay Tisch): No, you brought me in.

Your experience, Mr Assistant Speaker, has been in business evaluations. You would never make this appalling mistake.

The ASSISTANT SPEAKER (Lindsay Tisch): No, don’t bring me into the debate—don’t bring me into the debate.

I do not want to bring you into it, Mr Assistant Speaker, but, then again, you came here with experience. They did not. They are naive in the extreme.

Here is my point. The second question I want to ask the banks is: tell me just how long and thorough your due diligence process was. Because if it was not long and thorough, why on earth am I passing legislation to save your financial skin?

I am sick and tired of this going on. These banks rip people off. They make massive profits. The ANZ and BNZ have, in times of 1 percent growth, made 50 percent in annualised profits each a year, and—

💬 Hon Michael Woodhouse: Don’t become a profit hater.

Oh, of course, you cannot mention the banks because that is where the money comes from for the National Party’s campaign. You see what I mean? Everything is conflicted.

The last thing I want to say to Mr Sabin is that you owe the people of Kaipara more than this. You owe the people of Mangawhai more than this. You owe the people of Mangawhai a full-scale exposure of what happened here. I think—

💬 Mike Sabin: If the member had taken just—

No, no, there is no use shouting out to me, because I am going to get on the road to Dargaville, I am going to go to Kaiwaka, I am going to go to Mangawhai, and I am going to go to every little town and tell them what their local member will not do for them. Then I will tell them what a great party will do—that is, expose this sort of underhand financial dealing that ends up costing the good citizens of Kaipara a pretty packet—and no sewerage, as well.

The next call will be a split call. Moana Mackey—5 minutes.

I think that speech by Winston Peters probably highlights the fact that the Kaipara District Council (Validation of Rates and Other Matters) Bill is actually a very difficult bill. Despite the fact that peace had pretty much broken out across the House in terms of accepting that we had to do something, we should not be under any illusion that this is a pleasant bill to pass, that the issues that we are dealing with are not serious, or that the issues we are dealing with are not very concerning. A number of members have said that it is the right thing to do. I think I would probably describe it more as the least bad thing to do. Of a number of very unpalatable options, it is the least unpalatable of all of them.

Retrospective legislation is not good practice, especially not when dealing with the kind of situation we have seen up in Kaipara—the complete mismanagement and mishandling of the implementation of a waste-water scheme, and the loans and debt that went alongside that. I think it is fair to say that when the Local Government and Environment Committee travelled up to Maungatūroto and heard submissions, we were deeply, deeply concerned. There was a bit of pressure on the select committee to report back promptly to try to get this issue sorted. But we spent a lot of time working on this bill, trying to ensure, as much as we could, that what we were doing was in the best interests of the ratepayers of Kaipara and that we could find a pathway forward.

Our big concern was that the Auditor-General was looking into this issue. Clearly, there had been audit failures. The fact that it took ratepayers throughout the Kaipara District, and particularly in Mangawhai, many, many years to get any action on what was happening there and to shine a light on what was happening within their council was deeply concerning. The Auditor-General is looking into that. That process has dragged on and on and on. There are serious natural justice implications in terms of the Auditor-General’s report.

We had hoped that the select committee would get to see that report before we deliberated. We held the bill back at the select committee on the understanding that the report would be coming out at the beginning of November, because there is a difference between retrospectively legalising or validating a simple mistake versus validating gross incompetence versus validating corruption. So there could have been a number of reasons why we got into this situation. Those are, kind of, the reasons we could have got there, and, obviously, the select committee was very keen to get some confirmation from the Auditor-General through that report that we were not going to be retrospectively validating corruption. I want to thank the Office of the Auditor-General officials, actually, for coming into a closed session and providing us with information. They were not able to tell us what was in the report, but they provided some peace of mind that nothing in the report that they were going to produce ran up against this piece of legislation, because that was a major issue for all members of the committee.

The other interesting thing about when we went up to Maungatūroto and heard the submissions was that it is not clear-cut who is opposed to this and who supports it. There were ratepayers in Mangawhai who supported the bill. There were ratepayers in the rest of the Kaipara District who did not support the bill. Then, of course, there were obviously the ratepayers in Mangawhai who were very much opposed to it, just as there were ratepayers in the Kaipara District who were very much in favour of it. You know, the ratepayers in Mangawhai have often been typified as being just wealthy people who do not live there. Actually, that is no reason to say that they should have fewer legal rights or any less protection of their legal rights. It does not matter whether they are wealthy or whether they might live on the North Shore; the fact is that if they have been wronged, then that needs to be rectified. In fact, what we also learnt was that there are a number of people living in Mangawhai who are now faced with massive rates increases who are actually on very low incomes.

This is not a black and white issue. This is not a rich versus poor issue. This is not even a Mangawhai versus the rest of the Kaipara District issue. It is far more complex than that, and the select committee worked incredibly hard to try to find a way through this. None of us thinks that this is great legislation. None of us thinks that this is a perfect solution. But the reality is that there is significant impost being put on the rest of the ratepayers in Kaipara in terms of the services that can be provided and in terms of their access to New Zealand Transport Agency funding for their regional roads, which they cannot get until this is fixed. We did manage to negotiate an agreement to have an amnesty on the penalties, which I think is really important, to recognise that if they were illegally struck, then to penalise people for not paying them—it is a goodwill gesture of the commissioners to say: “OK, well, we will have an amnesty on that and we will not put those penalties in place.”

I look forward to New Zealand First’s Supplementary Order Papers in the Committee stage in terms of its solutions as to what would be a better way through than this bill. We will seriously look at those Supplementary Order Papers to see if it can come up with a better way through that is fairer for everyone. This legislation was the one solution that was of the least cost to the Kaipara District ratepayers.

I rise to speak in the second reading of the Kaipara District Council (Validation of Rates and Other Matters) Bill, which is sponsored by Northland MP Mike Sabin. This is a bill with a very narrow purpose. It validates specified rates set between the 2006-07 and 20011-12 financial years. That is it. This bill is the best solution to fix some of the irregularities so that the council can continue to function. Under the commissioners who have been in place for the past year, that is just what this council is doing.

The Local Government and Environment Committee heard a lot of submissions, as other speakers today have alluded to. There were 133 submitters who were opposed to the bill. We received 157 written submissions. But when you analyse them in more detail, 24 submissions were in support of the bill, and one of them was representing 88 additional people. So we are very aware that 112 people who submitted to us were very much in support of this member’s bill by Mike Sabin. I think that needs to be kept in mind, because everybody agonised over this bill. It was so far from ideal, it just was not funny.

I think that those of use who were at Maungatūroto and who have been at the hearings in Wellington also are very well aware of how much angst and misery has gone on over this particular situation for so long. In fact, Graeme Ramsey, who was the former mayor of the district of Kaipara for 6 years, up until 2004, which was well before these difficulties began, actually outlined to us that there was some 30 years of controversy surrounding building a community waste-water system. There had been problems with a fast-growing community and there were issues with water quality in the harbour. Nobody had any accord or any agreement. Against that background, a deeply divided community came up with a solution and elected a council that did them wrong and that did the wrong thing. Whether it was incompetent, or whether it actually had corrupt practices, those are the measures that will be determined by other findings, by other reviews.

I have to reaffirm this: this particular piece of legislation, which is the best that could be done under the circumstances, does not impinge on any of the other inquiries under way. The Office of the Auditor-General’s inquiry into the EcoCare sewerage scheme—the independent inquiry of the Auditor-General—and the commissioners’ inquiry into matters aside from the above, including the actions of the former chief executive officer, will all continue, and this piece of legislation does not impinge on those. What it does allow people to do is to get on with life.

We have heard from the commissioners. The chair of the commissioners, John Robertson, appeared before us on several occasions. He is somebody who has worked very hard to ensure that they are putting in place mechanisms that will help, and they have done so already. Much has been achieved. Finances and risk management, and financial reporting processes, are now in place to monitor performance.

I am going through these because I know very well from people who have come to speak to me at my clinics on the North Shore, and from hearing and listening carefully to the submitters, that there are a lot of people who feel that things are going to be in a very bad and dreadful state. I want to take this time to reassure them that much has been done. When this piece of legislation goes through before Christmas, they will then be able to get back on track.

On rates, the commissioners have achieved a balanced budget. Their forecasts indicate small rate increases through to 2022, which will pretty much essentially cover inflation. Significant council resources have, of course, been applied to this. This is why I think, apart from one exception, there has been a real unanimity of purpose around this. We did not like to think that all of the people in the Kaipara District—not just those in Mangawhai, with the sewerage scheme, but everybody—are paying for this. Everybody is having to dig deep over a series of problems and irregularities. It is very important that we have hope for the future, and that hope has been given.

I would like to end what is, unfortunately, a short call on this—and I will speak further on this in the third reading—with some of the things that have been said to us by some of our submitters. They said that there can be no solution going forward, and they cannot have justice in this district, by withholding revenue from the council. Clause 14, as others have said, will enable everybody who wants to, to have their day in court and to hold people accountable.

I agree with the sponsoring member, Mike Sabin, that the auditors and others probably have a case to answer, and this is not a “get out of jail free” card at all. Of the people who have submitted to us, I will end with Graeme Ramsey, who commends this legislation because “Passing it does not excuse past mistakes nor absolve decision makers and advisors from responsibility. Rather it provides a basis on which we can move forward.”, and rebuild the trust and mend the broken relationships. Thank you.

I understand that the next call is a split call. I call the Hon Maryan Street.

It does not give me a great deal of pleasure to rise to speak to this bill, the Kaipara District Council (Validation of Rates and Other Matters) Bill. I have spoken vehemently about it in the past. I was on the Local Government and Environment Committee for most of the consideration of this bill, although I have not been most latterly as my portfolio responsibilities have altered and I am no longer on this committee. However, I was there, as I said, for the consideration of this bill. I was there at Maungatūroto for the hearing of submissions.

This has been a hornets’ nest, quite frankly, where every time something was addressed or another submission was heard, another layer of less than stellar behaviour was revealed. I do not think that there is anybody who comes out of the consideration of this bill with everything they want. First of all, I wish to add my objections to those of others about passing retrospective legislation. It is a truism to say that we do not like to do it in this House, but it seems that we have had a number of these bills to deal with in recent times. I hope that the resolution of this issue, although not pleasing everybody, will, in the course of its being heard, have raised a number of red flags to those involved in local government around the country. It is not good enough to make mistakes, apologise for them, and then get Parliament to address them. That is not good enough.

In addition to that, my colleague Moana Mackey referred to various degrees of dissatisfaction, ranging from genuine errors through to potential corruption. I hope that there has been enough exposure of the behaviour of a range of parties here to ensure that those engaged in local government—and I do not mean just elected officials, though always elected officials, but also those appointed to positions—are working to the highest ethical standards that a community would expect their local council to adhere to.

I want to deviate a little because it is important and it is relevant to this as of yesterday. I am very hopeful that this is the end of this matter—albeit to many people’s dissatisfaction—in Kaipara. I hope that they are looking forward from here, because just yesterday there was a joint statement from Northland authorities, commending the Local Government Commission for its recommendation for one super-council in the north. So a joint statement on behalf of the Far North District Council, Kaipara District Council, Whangarei District Council, and Northland Regional Council said that they were prepared to work together to put issues of the past behind them and to make sure that the new legislation, which would be introduced to Parliament soon, could work. I hope that is the case for the people in the Kaipara District.

This would be a really significant move forward if this piece of legislation can be the end of this unpleasant episode. It is not about rich versus poor, not about inhabitants versus visitors, and not about those who pay and those who use. We can look forward to one large council, working with one mayor, and a range of geographically spread boards to represent the issues. I hope that will be a more permanent fix for the people of Kaipara than this bill will be. Thank you.

In keeping with the general theme of this debate this evening, I stand to restate the Greens’ very reluctant support for this bill, the Kaipara District Council (Validation of Rates and Other Matters) Bill. We take no pleasure in it. Our very capable and experienced colleague Eugenie Sage sat on the Local Government and Environment Committee and came back to the caucus recommending that we do support this bill—previously we had agreed to support only its referral to the select committee—through its further stages. We accepted that recommendation basically because we felt that any other course of action would actually worsen the situation of the people in Kaipara, and particularly the people of Mangawhai. It is not a happy situation, but the financial and social situation could only get worse if we do not do something in this Parliament to resolve the shambles, the mess, that has been created.

The commentary of the bill refers to “a number of irregularities” that must be validated. That is very genteel language, which is entirely appropriate, I suppose, in a written piece of legislation. But it actually understates the scale of the sheer incompetence, the illegal activity, and the unlawful activity that was occurring over a number of years, and it is very unfortunate. One can get a sense of the scale of it by looking at the bill. It is an odd bill in the sense that the substance of the bill is in a dozen or so—14—clauses, over five or six pages. The other 20-odd pages of the bill are the preamble, where the shortcomings, the failures, of the Kaipara District Council are documented. The words “the Council failed to comply”, or variations on that phrase, appear no fewer than 45 times. It is a litany of errors. It is a disgrace to those people who were on the council, and it must be said that some of the disgrace must be shared by some of the entities whose task it was to have an eye on what was actually going on in that situation over a number of years.

I would have to say that the committee has brought back a much better bill. There have been some significant changes made that I think have tipped the balance for us in terms of enabling us to support it. Of course, key to those would be, in clause 3, “Purposes”, the deletion of paragraph (g). The purposes clause outlines a sort of veil of legality that is going to be drawn over the illegal acts and the incompetence of the council over time. The original drafting of the bill sought to include a catch-all provision—a genuine “get out of jail free” card, as it was called earlier. The language was something along the lines of validating “any other actions or omissions”. Not only would that be unreasonable in the context of this bill but it could have set a fairly dangerous precedent—an expectation that all would be forgiven. A great deal is being forgiven in this bill, but it is important that we do retain the right—

The ASSISTANT SPEAKER (Lindsay Tisch): Sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.

Sitting suspended from 6 p.m. to 7.30 p.m.

Just before the break I was making the point that the select committee has brought back a better bill than the one it received up front. It is still not a lovely piece of legislation, but the committee has done some good work.

One of those things is to ensure that those who have withheld their rates will not be penalised, and that any penalty payments that were added to rates of those people who were for principled reasons withholding payment will be waived. That is as it should be. The point has been made that it was referred to as almost a token return because the people of Mangawhai, particularly, are facing very large bills, but I think it goes beyond that. We know that, yes, there are some quite wealthy people living in that area, but, equally, there are quite large numbers of people who may be asset-rich, but who are on fixed or low incomes. For them, the extra penalty payments would have been quite a significant burden to bear.

The last point I would make is that I think the point about the banks—or rather, Local Government New Zealand suggested that the idea of the banks bearing some responsibility could lead to higher interest rates for other local bodies. I think that if the banks have loaned this money carelessly or without due diligence or thought, then there is a case to be made that they ought to bear some of this responsibility. If they are getting too comfortable—too much in the comfort zone; thinking that they could never go wrong by lending to local authorities—and if they are just not doing good business practice and risk profiling, then perhaps they should stand up and accept some of the responsibility, as well.

We will have more to say at later stages, but for the moment, thank you.

We had a number of quite rowdy speeches before the dinner break on this bill, the Kaipara District Council (Validation of Rates and Other Matters) Bill. I am referring to a very senior politician, the leader of New Zealand First. I do want to get back to the serious nature of this debate. There is no question that the Local Government and Environment Committee, which I sit on, has had a very lengthy consideration of this bill. It has been on the committee’s agenda for a long time, and the committee members wrestled very hard with this legislation because nobody was very enthusiastic about retrospective legislation.

We were presented with no real, good options. Every option was painful to some degree. We heard with great concern the stories and real concerns of the ratepayers, particularly in Mangawhai, who felt that very inappropriate things had happened on the Kaipara District Council and that spending had ballooned out of control. They were concerned that this legislation might in some way validate acts that were illegal or inappropriate. So there was a long, painful process of teasing out what indeed the reality was that we faced and the narrow nature of this bill.

I do want to make special mention of my colleague Mike Sabin, the MP for Northland, who shepherded this bill through the House in a manner that was forthright and straight up and down, as we would expect from a straight shooter from Northland. There has been no doubt that he has indefatigably defended the interests of all the ratepayers and people in the Kaipara area and tried to navigate his way through what has been a very difficult issue.

The first option that we had was to weed out and differentiate acts of omission on the part of the council, which were legal acts of rating that were done where the i’s and the t’s had not been dotted and crossed properly and the legislation had not been dealt with, and separate those from anything that was more broadly an issue of concern. Then we were faced with the other option, which was to do nothing—not pass the bill—and then perpetuate a problem where a wider set of ratepayers in the region were left carrying the can while a smaller group went on strike, largely on a point of principle.

It seemed to us that when we drilled down into the issue, the longer we delayed this legislation the more costs were being piled on to the local council and, effectively, on to the wider set of ratepayers, and that was becoming intolerable. So after much agonising we agreed nearly unanimously—although it appears that New Zealand First has drifted off in another direction—that this bill made sense.

So if we could just go through some of the details, the bill authorises both the rates and the penalties added to rates to be recovered, as is normal for local government validation legislation. We have before the House at the moment not just this piece of legislation but also a bill for the Tasman area. Nobody is enthusiastic about this legislation. It does raise the broader issue of just how effective councils are being in navigating their way through what are very complicated requirements in legislation.

If anything comes out of this whole episode, I think it is that we do need to think carefully about how we put many sets of hurdles in front of relatively small local councils and then expect them to do everything perfectly. There are two sides of the equation. One is that you expect councillors and councils to do an effective job at raising rates, which is one of the most important functions that they have, but also we do not want to have legislation that is overly complex and makes it difficult to achieve perfection.

The select committee, when we heard all the submissions from various parties both in Mangawhai and in Auckland, recommended amending clause 6 to ensure that penalties can be charged only if they would have been added to rates validated under this bill. There was widespread concern that some of the penalties were on the heavy side for people who had been caught up in this. There was a long argument about that, but I think the collective wisdom—again, guided by the practical, pragmatic no-nonsense approach of Mike Sabin—brought us to a situation that I think has the best chance of getting a sustainable outcome for this community and the wider region.

If I move on, some committee members felt that some more of the penalties should have been remitted, and, again, we thought about that carefully. The commissioners—appointed at the request of the council in 2012—have agreed to take a proposal to the council in which certain penalties would be forgiven if the bill is enacted in this calendar year. The importance of enacting this bill in this calendar year is that, as we were told by the commissioners, with each passing month and each passing 2 or 3 months, more and more cost is being put at the feet of ratepayers, particularly if it means that they are unable to successfully claim some of the regional roading subsidies that are available. So penalties applied in the 2013 calendar year, as well as penalties due to be applied on 1 January 2014, will be remitted under this proposal.

When I drill down further into the specifics, the bill validates the following. It validates specified rates set either inconsistently with the council’s funding impact statement and/or not allowed for under the Local Government (Rating) Act. Clause 3(b) states it will “treat all money received by the Council in payment of the specified rates or penalties added to those rates as having been lawfully paid …”. Clause 3(c) states it will “authorise the Council to recover any part of the specified rates and any penalties added to those rates that remain unpaid …”. Clause 3(e) also states it will “validate the information contained in the rates assessments for the financial years relating to 2006/2007 to 2012/2013 (inclusive);”.

When we look at the long-term plan and annual report, this bill will also “validate other actions or omissions of the Council relating to—the continuation of its 2006 development contributions [levy] … the late adoption of its annual report for the 2011/12 financial year and its long-term plan for 2012-2022; and (iii) its conduct of the special consultative procedure for its long-term plan for 2012-2022;”. None of these things were handled particularly well by the council, but again the committee was left with that series of difficult choices, and we plumped for correcting those inadequacies.

Finally, for the absence of doubt in terms of accountability clause 14 was amended to make it clear that any person, not only the Kaipara District Council, has the right to bring proceedings. A number of submitters were concerned that if we passed this legislation they would be left with no ability to hold people to account for wider acts of omission—particularly the quality of the spending on the waste-water plant—or the lack of quality of that spending. We were very concerned to hear from the Auditor-General, as a result of her work but also of the wider investigation of the quality of that decision making, so that we did not by this legislation make it impossible for people to hold those people to account for those actions.

There is no question that the Kaipara District Council has had a difficult few years. As well as the rating irregularities, the council presided over what has proved to be a very controversial Mangawhai sewerage scheme and a considerable increase in debt. This bill does not stop, as I said, the proper scrutiny of those decisions. Nor does it absolve anyone of responsibility or culpability. If we go back, we note that the commissioners were appointed by the Minister of Local Government at the request of the council in September 2012. This bill does not impinge in any way on several inquiries under way, particularly the inquiry by the Office of the Auditor-General into the Mangawhai sewerage scheme.

So all in all this bill has been a difficult one for the select committee. We wrestled with it. We do congratulate the MP for Northland, Mike Sabin, who was left to carry this burden and did it with good grace. I commend this bill to the House.