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

If you thought that Part 1 and the preamble were fascinating, I am delighted to be able to take a lengthy call now, analysing clauses 5, 6, 7, and 8, and then, the exciting culmination, clause 9. There were no changes recommended to those, but the process of how that conclusion was arrived at is indeed fascinating. I am, of course, hoping that the sponsoring member, Damien O’Connor, will be able to shine a little light on how the community has responded to the progress of his member’s bill, the Tasman District Council (Validation and Recovery of Certain Rates) Bill, so far, but I see he is deeply engaged in conversation. Perhaps at a later moment he might be able to sort of elucidate and come to it. I could ask him again, really—now that you are paying attention—to talk about the community and how it feels about this validation and whether it will in fact smooth over some of the hurt feelings and problems that have happened.

When we look at clauses 5, 6, 7, and 8, they are specifically concerned with the validation of the specified rates, the validation of penalties, the payment of specified rates that have been declared lawful, and then, clause 8 itself, the “Recovery of unpaid specified rates or penalties declared lawful”. A number of submitters opposed clauses 6 to 8, in relation to the penalties in particular. One submitter’s view that was particularly interesting was that the council should be limited to being able to collect only the base rate but not the penalties for late payment on the base amount. This is the logic around it: the ratepayers who had delayed paying the rates because they were invalid should not be penalised. This was considered unjustified because it would mean that the council would then be benefiting from its own errors, which is, of course, something that we need to take into account. After all, as every good parent knows, you cannot reward bad behaviour. By benefiting from its own errors, the council would indeed be in a difficult situation. Well, in fact, it would be in a good situation, but that would send a very bad signal to other councils.

One submitter, on those clauses 5 through to 7, suggested that penalties should apply only to amounts that remain unpaid after some specified period after the Act comes into force. So you will appreciate that there were a number of submitters who had given this a great deal of thought, time, and energy. The officials, for their part, also devoted a lot of time and energy to this. As I said in my earlier call on the preamble, it is a shame that something like this has got to the stage that it has and that it has wasted so much of the House’s time and the taxpayers’ money. But there it is—that is the nature of democracy. We know that the Labour members’ short concentration span on the whole cannot really tolerate it, but we will go through it—

💬 Jacqui Dean: They find it boring.

Yes, they find it boring. That is a very, very telling observation. I think that they seem to find most things boring, which is probably why the local government reforms will go through, and they will go through without too much in the way of rigorous opposition, because Labour members just cannot marshal the intellectual rigour to be able to counter any of the excellent arguments that we put forward. So there you go—they are indeed wallowing in their short concentration spans and their problematic moments.

I would like to go now to the recommendations of the Department of Internal Affairs on the clauses. It did consider them to be appropriate for purpose. The department recommended no changes to clauses 5 to 8. When we come to clause 9, Mr Chair—and I know you will be interested in this—it makes explicit the nub of the problem, which is the 2006-07 Ligar Bay and Tata Beach stormwater rates. It made them valid and declared them lawful, despite the category of rateable land not being identified in that earlier impact statement. You know, floods occur occasionally in this area, and that was explained to us in detail by a couple of submitters—in particular, Mr Schmuke, who had gone to a lot of trouble to laminate several large photographs and had, as I said in my earlier call and as others have referred to, just taken it that step further.

Nine submitters opposed the validation of the Ligar Bay and Tata Beach stormwater rates. They were very much opposed to the initial levying of the stormwater rates on the grounds that no stormwater drainage services were provided by the council and that there was no need for them; therefore, why should they pay for them? Further, there was no initial consultation on the inclusion of Ligar Bay, so those ratepayers felt themselves disenfranchised, not involved in the process, and were obviously therefore very unhappy at what they were expected to pay. Submitters also opposed the validation of the invalid stormwater rates on the basis of the Ombudsman’s opinion back in 2009 that supported the position that levying a stormwater rate for Tata Beach was based wholly or partly on the mistake of law and fact. Really, was that natural justice? No, it was not.

So the officials had commented—

I thought I would just take the opportunity to answer a couple of questions I have been asked. On the one of accountability for mistakes and whether that has run far and wide, I can say that there were a number of councillors who lost their positions in the last election and a number of staff have been shifted around. So I think that that has occurred and hopefully the rest of them will have had the message.

On this particular part, Part 2, I would just like to mention on clause 9 that it was the request of the Ligar Bay and Tata Beach residents to have it removed so that, in fact, they would then have to go back through a full process of consultation as to whether the rates should be struck or not. The Local Government and Environment Committee, I have to acknowledge, brought the parties back twice—they were at the committee twice—to try to reach a common position on this. It could not be reached. On balance, the committee thought that it was essential that this Tasman District Council (Validation and Recovery of Certain Rates) Bill proceed for the good of all the ratepayers and that there should perhaps at some point be some acknowledgment of the Tata Beach and Ligar Bay residents. That is yet to be seen, but hopefully is to be committed to and honoured by the Tasman District Council. I am not quite sure how that might occur, but I think they probably deserve it.

Clause 9 remains in the bill and it proceeds, and it is up to the council now to ensure that fairness and harmony exist among as many ratepayers as possible. So, once again, I would just like to acknowledge the work of the select committee in giving it a fair go but arriving at what I think is a pragmatic solution.

I would like to take the time to focus in on clauses 5 to 9 of the Tasman District Council (Validation and Recovery of Certain Rates) Bill and on the details that for many members are hidden behind these words. A once-over-lightly reading might suggest that we are making some sweeping changes here, but it is important to note that clauses 5, 6, and 7 in particular are a summary of what we saw in the preamble. For example, in clause 5 here, it talks about the “Validation of specified rates” and says that “Despite the failure of the Council to comply with section 23 or 24 of the Local Government (Rating) Act 2002—(a) the specified rates are valid …” and on it goes. Well, sections 23 and 24 of the Local Government (Rating) Act, in terms of what we are having to validate in terms of section 23 by way of an example, the council in 2003 and 2004, as stated in recital (3), did not “state clearly that the Council was setting rates as required by that section”, which occurred in 2003-04. So there was the unlawful action covered by section 23 of the Local Government (Rating) Act. It also failed “to refer to all of the rates that were purported to be set”, so when the resolutions were made, the council, in effect, did not detail all the rates to be set. It sort of cherry-picked which ones it described in detail, and it should have actually resolved to set them all individually and, presumably, voted on each of them.

Also, the council did not comply with section 23 of the Act, as described in recital (4) of this bill. It did not “set the rates before the Council had resolved to adopt the annual plan …”, and that is an important matter. It should have adopted the annual plan, and then the rates setting falls out of that adoption, rather than the other way round. Recital (5) of the preamble also talks about the breaches of section 24 of the Local Government (Rating) Act, and, in this case, section 24 was breached because the council failed to state that all the rates were purported to be set in that particular year, “that the rates could be paid by instalments”—it never made that clear—and that, in fact, penalties could be added to the rates. It should have done that all under section 24 of the Local Government (Rating) Act 2002. So, in fact, when you look at recitals 5 to 7 of the preamble, where it talks about those breaches of section 23 and section 24 of the Local Government (Rating) Act, those are the specific breaches we are talking about. Of course, that is just in the 2003 to 2004 year.

So here we have a change that the Local Government and Environment Committee has recommended to these particular clauses of Part 2. For a start, for the sake of consistency, we are recommending a technical amendment be made to clauses 5(a), 6, and 9 to replace the term “declared to have been”—and we are talking about “declared to have been” made valid. We are saying that what we should better say, for the sake of consistency, is “declared to be and to always have been”, and that is much more thorough, all-encompassing, and clear. It leaves little room for any doubt in any courtroom across New Zealand, particularly in the courtrooms of the Tasman district, that we are talking about validating rates. They are “declared to be and to always have been” valid. So where this works out in clause 5(a), we are saying that “the specified rates are valid and declared to be and to always have been lawfully set by the Council”.

In clause 6 we are saying that “those rates are valid and declared to be and to always have been lawfully imposed by the Council.” In clause 9 we are saying that “the Tata Beach stormwater rate for the 2006/2007 financial year are valid and declared to be and to always have been lawfully set”. So there you have in clause 5(a), “always have been lawfully set by the Council”; in clause 6, “always have been lawfully imposed by the Council”; and, again, with Tata Beach, in clause 9, “set and assessed by the Council”. So it is very, very important to note that we have made that technical change. I would encourage parliaments moving forward—so for the rest of this year, and, I guess, if most of the country feels this way, hopefully with a National-led Government for the next 3 years—to include the consistency that we have included tonight. That is not to simply say “declared to have been”, but to say “declared to be and to always have been”.

I do want to touch a bit more deeply on clause 9 of Part 2 as well, and that is the validation of Ligar Bay and Tata Beach stormwater rates. The committee was tempted—and many members of the committee are more open to temptation than others. Some of us try to lead more pure lives than others, but some are tempted. We were all tempted to a degree by this issue of actually wiping clause 9 off the record books. Given the historic nature of the rating errors in question, and being a very open Government and honest about what we do, this would be difficult, because without such validation, a council would then be required to do a whole bunch of things regarding Ligar Bay and Tata Beach. It would have to determine which ratepayers had paid the rates in 2006-07 and the amounts they had paid, and ascertain whether the current ratepayers are the same ratepayers as those in 2006-07. What an onerous task. It would have to apportion the rates if there were multiple owners of a residence—so if there were two owners over that time period, it would have to apportion the rates, presumably pro rata. If there were three owners, it would have to apportion them three ways, four ways, and so on, depending on the turnover of that property. It would have to write to each ratepayer advising them of the amount of the refund and requesting bank details for repayment.

It is a difficult task tracking those people down, getting their consent, getting their bank account details—finding out all those details—and, in the end, having the permission to do so from the individual. So it is a difficult task indeed. We decided that we would in fact retain clause 9, albeit in an amended form. So that is a pragmatic solution to the issue of validation of Ligar Bay and Tata Beach stormwater rates.

I move, That the question be now put.

Motion agreed to.

Part 2 agreed to.

Clauses 1 and 2