Christchurch City Council (Rates Validation) Bill

I move, That the Christchurch City Council (Rates Validation) Bill be now read a second time. As the member in charge of the Christchurch City Council (Rates Validation) Bill, I really welcome this second reading. This is a very simple bill. It is all about fixing an error, an error that I believe was made with the best intentions. It is one of those really annoying and frustrating situations where bad things happen when you are trying to do good. It is about validating rates irregularities in the past that were only discovered by the city council last year.

Back in 2004 the Christchurch City Council consciously opted to simplify the language of its rating resolution, but it left out important information, which meant that its resolution did not comply with the Local Government (Rating) Act 2002. All the information that was required was presented, but it was presented elsewhere, and not in the new simplified, streamlined resolution. On discovering that, the council undertook a review of all its resolutions since 2004, and found other technical irregularities in relation to seven targeted rates and the uniform annual general charge. Again, all the correct information was provided, but not in the actual resolution. The council was able to fix the mistakes for the 2013 and 2014 financial years, but it needs this validation bill to validate its past setting of rates, payment dates, and penalty regimes. But let me make this very clear: this is not about the rates being calculated wrongly, and all the rates have been lawfully paid. No one is wrongfully affected by this bill.

I would like to thank the Local Government and Environment Committee for its work in scrutinising this bill, for its support of the bill, and for the fact that it returned this bill to the House unamended. I would also like to applaud the Christchurch City Council for acting swiftly to deal with this matter once it was discovered. Parliament does not like validation bills. We hate the fact that we are dealing with retrospective legislation. I am sure many members tonight will show their displeasure. But I have a sympathy for the council, because we also want simple legislation, we want simple resolutions, and we want people to be able to understand what is going on in local government. Also, nobody likes to admit that they have made a mistake, particularly if it was well intentioned. There is always a temptation to let sleeping dogs lie, but the city council has fronted up, and I say well done to it.

Actually, I would like to take this time to spend a few moments paying tribute to the Christchurch City Council and updating the House on the huge workload it has had and what it has been doing since the 2010 and 2011 earthquakes. As you all know, it has been a tough time in Christchurch. It has been extremely difficult for the Christchurch City Council to keep the business-as-usual work under control, as well as managing the challenges of the rebuild. Everyone in Christchurch is aware that we have to fix the past while we live in the present and while we build for the future, and that takes a bit of juggling. We have learnt that out of crisis comes opportunity. We also feel that the only way that we can reconcile the pain and loss of the last few years is by making sure we take every opportunity to build a better place for future generations. The earthquakes have sharpened our focus on what is important to the people in Christchurch.

Everyone in the council, and, actually, everyone who works in the Canterbury Earthquake Recovery Authority, is absolutely committed to making Christchurch a safe, beautiful, and people-friendly city. We want it to be a future-focused place, a place where exciting, innovative, and enterprising things can happen. We want to retain our sense of community and of supporting each other that served us so well during the disaster, and also our open-mindedness and our action orientation that our shaken-up city required, and our ability to work together for the greater good. Leading a community in times of crisis and enormous change requires really tough decision-making. Decisions have to be made rapidly, often with scant information, in a changing environment, and with a risk of unknown consequences. I pay tribute to the mayor, Lianne Dalziel, and all the councillors and the officials who work at the Christchurch City Council, for stepping up to that challenge and giving it their very best. I know at times it feels a bit like a thankless task, but it is hugely important for the future of our city, and their work is greatly appreciated by those who understand the challenges.

It has been over 140 years since Christchurch was first planned and built. Those were the days of horses and carts, cooking on a fire or a wood stove, washing in the copper, candles, and the dunny in the backyard. School was about slates and the strap, and life was short. Today we are envisaging the building of a modern, flexible, future-focused city: a city of electric or even driverless cars, organic food and nutraceuticals; a city with an integrated alternative energy grid, buildings that are automatically lit and heat-adjusted, and with high-tech water and sewer schemes. School is an amazing modern learning environment with digital devices, and our life expectancy is increasing year by year. It is the responsibility of all of us to build a city that enables our community to adapt and develop as times change, and with the flexibility to be able to manage those unknown innovations of the next 140 years.

In this bill, we validate unintentional errors in the Christchurch City Council rating resolutions from 2004 to 2012, but I would also like to take the opportunity to wish the council well. It is doing a great job in challenging times, and the people of Christchurch appreciate it. Thank you.

I can see, Mr Deputy Speaker, that you are allowing a very broad-ranging debate on this second reading of what is a very narrow piece of legislation—a piece of legislation that is about validating rates in Christchurch. I see that you are wanting us to traverse the terrain in all its many corners, and I will, too, Mr Deputy Speaker—I will oblige. And I am sure my colleagues will, in their contributions to this bill, feel free to frolic around the plains of Canterbury in how they address this. Because as the speaker before me, the sponsor of this bill, said—and I want to acknowledge the Hon Nicky Wagner—this is a very specific bill with a very specific task: it is about rectifying a mistake that happened with the way rates were struck in Christchurch over a period of time.

The Minister did say that it was a mistake made “with the best of intentions”. Well, I am not sure whether mistakes can be made “with the best of intentions”. I do believe it was probably a mistake made “without malevolence”. I do believe that it was probably a mistake “not made on purpose”. But I do not really think that we can make mistakes “with the best of intentions”. But none the less, Christchurch City Council finds itself in the situation of having had a period of time when rates were not struck the way they should have been. And the way that it has asked for this to be rectified is by a piece of validating legislation. That is what we are here at the second reading to debate and to kick around in a very broad-ranging way.

What we have here, though, is something that this Parliament should not be making a habit of—that is, fixing mistakes via legislation. When we considered this piece of legislation, we on the Local Government and Environment Committee were very much of the united mind—if I could put it that way for our select committee—that actually—

💬 Hon Ruth Dyson: Was Peter Dunne on it?

No, Peter Dunne was not on that committee and was not part of the united mind. What we had was a crossing of the ways in wanting to ensure that we as a Parliament are doing all that is in our power to ensure that we do not land back here, having to fix up mistakes that have been made because we do not have adequate guidance or adequate oversight on how rates are struck by local body authorities. This is something that I know, from my perspective on the committee, I am very keen to get on the record.

During the first reading speeches on this bill, my colleague Su’a William Sio said that this legislation is between a rock and a hard place—that we know it has to be done, that we need to fix this genuine error, but that it is never something we like doing. And in the contribution he made on the bill, he said that he wanted to hear what it was that the people of Christchurch had to say on the matter. The select committee, even before this Parliament reconvened, was busy at work—the hard-working committee that we on the Local Government and Environment Committee are. We were in Christchurch hearing the submission—the one submission that we heard on this bill.

We did other work in Christchurch; I would not like to imply that we did not do a full day’s work. We also had the question of the legislation that we debated in the debate prior to this, the Arts Centre of Christchurch Trust Bill, to deal with on that day. We heard from Christchurch City Council, and we heard how it was that it discovered this error. The speaker before me, the Hon Nicky Wagner, described this—it really was through the thorough order of their processes that it was discovered; that this transition to a simpler language was found. I think it was very insightful. It was actually a really good experience for the committee members to listen to that—and then to participate in the discussion that followed about what the responsibilities of this House are, to ensure that we do not get into those situations again.

Mr Deputy Speaker, you will notice that I have been speaking very specifically on this very narrow piece of legislation, but now, since we are in the broad-ranging part of the debate, I would like to venture out a little further, as it were, because what we did hear the Minister do, after she dealt with the substance of why it is that we are here today, was to put the legislation in the context of our recovery. Personally, I do not think that this needs to be put in the context of our recovery; I think that, actually, to put it so can be somewhat patronising to the people of Christchurch—that what we have is something that other local authorities have gone through. But to use this debate to talk about what a wonderful job it has been and about how great things are in Christchurch is, actually, something I would rather not have seen. Yes, there are contentions around how the recovery in Christchurch is going. I did not want to have to use this debate to debate those issues, because that is not what this legislation is about—this is legislation about how it is that Christchurch City Council is asking us to fix a genuine mistake. But talking about organic food and nutraceuticals in the context of this legislation, as we heard from the previous speaker, is somewhat of a stretch.

I would like to talk about housing in the context of this bill, and, if we are going to talk about the recovery, I want to talk about the lack of housing that we have in Christchurch. I want to talk about the level of rates that people are paying in the city of Christchurch—

💬 Mr DEPUTY SPEAKER: Order! Thank you. I would not like the member to think that because the member promoting the bill made some magnanimous and inclusive comments around Christchurch and its recovery that she should stray from her first thoughts, which were that she should keep the debate relatively tight. She made the comment that she would not like to think that she had to stray broader than the mandate of the bill, and I would remind her that she does not. In actual fact, the comments that were made by the member initiating this legislation were magnanimous in respect of Christchurch, and were obviously well-meaning. I guess that what I am indicating to this speaker and to other speakers who will take calls, is that they should bear in mind the particular strain in which those comments were made, and bear in mind the scope of this bill. If I was recalcitrant in some way by not paying as close attention as I should have, that does not necessarily give subsequent speakers licence to wander off around the paddock and cut their own track in respect of the scope of this bill, which, as the member has already conceded, is very narrow.

Thank you, Mr Deputy Speaker. I take your wise words on board. We are here tonight debating a ratings bill. Ratings are levelled on property, as we all know—rates. And what we are validating here are mistakes that were made with how the rates were struck in Christchurch on individual properties. Many of those houses, actually, have now gone; some of the houses that this bill affects were actually some of those that were demolished as a consequence of the red zone. I think we would all acknowledge how sad that is and what Christchurch has been through, in terms of that. But I would also note that perhaps we have not had the rebuilding of as many houses as we would like to see, to replace those properties where rates could have been struck, or otherwise had been struck. This is what we have to think about if we are going to be thinking about this piece of legislation in the context of the rebuild and recovery of Christchurch—what it means for our city; what it means for what we could be. Because this is about the ratings base of Christchurch, this is about where people live, and this is about the homes in which people enjoy their lives, when we are talking about rates, because this is the way that it has been chosen to be done. So I would like to raise that in the context of this legislation.

I think one of the things that some of the speakers said when this bill was previously before this House did raise a question. I referred earlier to the contribution that my colleague Su’a William Sio made, when he said that he invited members in Christchurch—and I quote from William Sio’s speech: “We support this bill through its first reading. I would invite all members and citizens of Christchurch to take the opportunity to submit on this bill and make their views known to this Government about the lack of action that they are seeing in the rebuild there. Thank you.” That is from a first reading speech on this bill.

I myself think it is a shame that we did not hear from more people and that we did have only one submission on this bill. It would have been interesting to get feedback from the people of Christchurch on this, but I guess one of the things that we know—and I can reach across the House to my colleague Nicky Wagner, who is the sponsor of this bill—is what the people of Christchurch have been through and just how tired many of them are. There is a bit of fatigue, actually, among many people in Christchurch in terms of input into consultative processes—because there have been a number of them. There have many things for the people of Christchurch to have their say on and to input into, and I think this is probably one of the reasons why we did not have as many contributions as perhaps my colleague Su’a William Sio was thinking when he made that comment in his first reading speech.

I think that we do stand here with a very narrow piece of legislation that does a very specific task, which is about correcting a mistake that was made without malevolence. It is a mistake that does need to be corrected, because we need our ratings to be struck in a legal way and in accordance with the Local Government (Ratings) Act. Labour supports this bill in the House. In no way is this any slur on the Government, but we do not want to be here again supporting more validating legislation, as I am sure my colleagues across the House would concur. I think that we as a House need to turn our minds to how it is that we can avoid being in this place again, whether that be through the audit process or whether that be through issuing good guidance to councils as they strike their rates, to ensure that resolutions that confer either the legality or illegality of rates and how they are levied are struck and are something that we can have in place. Labour supports this legislation. Thank you.

As chairman of the Local Government and Environment Committee, it gives me no pleasure at all this evening to be standing in the Parliament of New Zealand supporting—reluctantly—retrospective validating legislation for an albeit sincere and non-malicious mistake, but a mistake none the less, made some 10 years ago by professional, highly paid, highly skilled, competent-on-the-face-of-it people employed by the Christchurch City Council. This is a bill that is sponsored by my colleague the Christchurch Central MP, the Hon Nicky Wagner. She has set out very clearly in her introductory comments to this second reading the reasons why we are debating in Parliament tonight this piece of retrospective validation legislation. The bill itself is promoted by the Christchurch City Council, which was, of course, the author of the error. The bill validates specified rates set between the 2004-05 and the 2012-13 financial years, and because of the rates irregularities that came to light in the council’s review, the legislation is, frankly, the only method for putting right an error that occurred more than 10 years ago and well before the Canterbury earthquakes.

Christchurch City Council failed to state in its rates resolution over those years that the rates themselves were payable by instalment. The excuse, if you like, or the rationale for the error was simply that it was to be a simple piece of internal local legislation within the city council, something that councils do every year in terms of providing for their fiscal responsibilities and their rating responsibilities under the Local Government (Rating) Act 2002. But what happened in this case was that no resolution was moved and passed through the council through the elected officials that ensured the rates were to be payable by instalment. Furthermore, there was no date set by which those instalments would be paid, and further, there were no penalties set and no penalty dates set for those instalments. Minister Wagner made the point in her comments—and she is right—that, actually, no ratepayer has been negatively impacted as a result of this error. But the simple matter is that had an alert ratepayer decided to challenge the city council on these matters over any one of those 10 years, then court action would have ensued and almost certainly the council would have come out the loser from that litigation. So that is a completely unsatisfactory situation for the ratepayers of Christchurch, it is a completely unsatisfactory situation for the elected councillors of Christchurch, and it is a completely unsatisfactory situation for the highly paid and professionally skilled employees who are supposed to oversee these relatively simple matters.

The failures actually put the Christchurch City Council in breach of the Local Government (Rating) Act 2002, and then, as a result of the investigations in 2013, when the irregularities were actually discovered, further irregularities were uncovered. They were in respect of the council’s uniform annual general charge and some of the targeted rates for the same period of time. Information about how the liability for targeted rates and the uniform annual general charge were to be calculated was simply not included in the rates resolutions that were put to the council in the council chambers for its attention.

My colleague the Hon Nicky Wagner—correctly, I think—said that bad things sometimes happen when you are trying to do good, but I would counter that by saying that the road to hell is often paved with good intentions. Just because something is meant to be simple, it does not mean that it needs to be incomplete, it does not mean that it needs to be inaccurate, and it does not mean that it needs to be incompetent. I doubt that many, if any, of the officers responsible at the time—and I hasten to point out that we are going back 10 years—would still be in the employ of the council, although I am not 100 percent sure about that. Certainly, it is several chief executive officers ago. So I am not necessarily going to pour scorn and derision upon current officers, but council officers at the time failed the council, they failed the ratepayers, and they failed themselves in terms of their professional ability and capability. Rates were calculated correctly, rates were collected correctly, but the rates motion—the actual legal bit, the piece that is important—was missed out, and that is a fundamental flaw for council officers, who, actually, are employed to ensure that the i’s are dotted and the t’s are crossed.

We had only one submission and, indeed, that was from the council itself. We travelled to Christchurch. As a select committee, we were able to link our visit with some rather better legislative work, and that was to do with the Christchurch Arts Centre and the bill that was discussed earlier this evening in Parliament. So when we came to consider the Christchurch City Council (Rates Validation) Bill, we received only one submission—one submission—from the council, and this is it. It is a mere two pages. It is a relatively perfunctory submission. It contains a clinical analysis of what happened, how it happened, and what needs to be done to correct it. The simple matter is that what needs to be corrected is that this Parliament is required to pass retrospective validating legislation to dig Christchurch City Council out of a hole. That is not a process that this Parliament likes doing. It is not a process that I think any member of the House thinks we should be spending too much time on. It is something that we certainly do not expect from a council as large, as well-resourced, and as significant as the Christchurch City Council.

What was immediately apparent to members of the select committee—and I think I speak on behalf of most committee members—was that the submitters on behalf of the council were relaxed almost to the point of being comatose in terms of their submission. They seemed to be just appearing before us in a perfunctory manner, saying: “Oh well, we made a mistake. All too bad, best endeavours, Parliament will put it right.” Well, I am not sure that that is necessarily very good. In the 2-page submission from the council there was no comment about contrition. There was no concession as to liability. There was no attempt to identify those people who were responsible. There was no indication that any kind of employment disciplinary action had been taken. In fact, there was no sense at all of any sense of personal responsibility for the situation that the council found itself in—which Parliament now finds itself having to remedy.

So it is fair to say that I thought, as chair, that our committee was singularly underwhelmed by the submission of the Christchurch City Council, and I for one did not come away from hearing its oral submission or indeed reading its written submission with any sense of renewed confidence in the future prospects for getting things right. That may be a little bit harsh, but I think that as a Parliament we could reasonably and sensibly expect a higher level of professionalism from one of the country’s largest councils. To expect anything less is an abrogation of its role and responsibility as a significant and large council but also in terms of the roles of professionals and employees of the council.

We all live and work in an environment of constant change. We are all only human and we all make mistakes, but this was a mistake of quite significant proportions. The fact that it did not negatively impact on ratepayers is a matter more of good luck than good management. I very reluctantly commend the bill to the House.

Firstly, I just want to make some general comments about the Christchurch City Council (Rates Validation) Bill and look to some of the substance of it. Then I want to make some comments with regard to what the member on the other side of the House, Scott Simpson, has just said. I think that by the end of this particular session we will be intimately aware of each individual part of this bill. It is a small bill; it is a fix-up bill. There is no denying that. It has been well traversed that the council needs this bill to pass in order to correct an issue that developed out of some work about 10 years ago.

When you look at the bill you see that the preamble to the bill is longer than the rest of the bill. It is interesting; there are a couple of sections, two parts, to fix up the issue around the fact that we need to ensure we can validate the payment dates for the rates and validate the penalties on those unpaid rates. We can look at the setting of the rates, that the revenue can actually lawfully be received by the council, and that it can recover the penalties on any outstanding rates. That is in Part 1 of this bill. Clause 4 looks specifically at the rates for the Church Bay sewer loan, the Church Bay water loan, the Governors Bay sewer loan, and the Governors Bay water loan. There are definitions around rates, rates invoices, the specific components within the rates—for example, the water fire service connection rate—and waste minimisation. But they are for the specific periods mentioned previously—the 2004-05 years and latterly the 2012-13 years. If we do not fix this, if we do not pass this legislation, it means that the Christchurch City Council will continue to be in breach of section 24 of the Local Government (Rating) Act 2002.

Thank you to the Local Government and Environment Committee for going to Christchurch to hear the submissions on this bill and on the previous bill concerning the Arts Centre. There was one submitter on this bill. Obviously, it was the council, and the bill came back to the House largely unchanged.

The previous speaker talked about how relaxed the officials were in their submission. He talked about the lack of contrition the council officials demonstrated and the disregard they had for their roles and their jobs by allowing this error to occur in the first place. I have to defend the officials of Christchurch City Council. It is a difficult job, but it is also rather ironic that that member chose to place upon the officials that responsibility when in this House every year we are presented with legislation that fixes up mistakes we have made in the past. Everyone makes mistakes. This is a bill that fixes up an error, and I do think it is ironic that in the privilege of this House we can condemn the officials from the Christchurch City Council but we do not take responsibility for errors we make in the drafting of legislation we pass. I want Mr Simpson to just recognise that these are hard-working people, and we are currently experiencing in our council in Christchurch City an extraordinary amount of work. They are currently engaged in the long-term plan process. There is a lot of stuff going on in Christchurch, and I, for one, am supporting the fact that our officials work very hard. They cannot be here to defend themselves today.

This bill is about the relationship between the council and central government. I have to say I am not entirely sure that the relationship that this Government has with the Christchurch City Council has been all that helpful or robust in recent times. Again, I say I do defend the officials of Christchurch City Council. They are doing their job. They have admitted they have found a mistake and it is our job now to correct that mistake, and we should do so with good heart and good intent. I do not think there is much more I can say on the bill.

💬 Carmel Sepuloni: There is.

Oh, is there? OK; I shall say a little bit more. [Interruption] I have been given the instructions. I want to just comment on that relationship between central government and the Christchurch City Council, because it is very important that we do what we can to ensure that relationship is strong. There have been issues—and I speak from my own electorate—between what the expectations of ratepayers and taxpayers are, and where the relationship between the council and central government has not entirely been that consistent or coherent.

I want to talk about the infrastructure that we are still waiting for in Christchurch East.

💬 Stuart Nash: Pity the councillors.

That is right. Thank you, Mr Nash. We should all be defending councillors. It is a tough job.

We are currently looking at ensuring that the infrastructure, particularly the horizontal infrastructure, in Christchurch East, is remediated to a point where we can actually have smooth roads, like other parts of our city. But I have to say that in that regard I do not know that the Government has actually come to the party for our ratepayers in Christchurch East. There is a partnership that needs to be forged and needs to continue to be robust. However, I am concerned that that is not the case and that we are still subject to some very damaged roads, some very dusty, dusty outlooks. We are still replacing the sewer and the rest of the lines in Christchurch East when much of the rest of the city is 100 percent back to normal.

I want to conclude now. I think I have pretty much said what I need to say on the matter. We do support this bill and commend it to the House. Thank you.

I call the member for Bay of Plenty, Todd Muller.

It is “Muller”, Mr Deputy Speaker, if it is possible to just anglicise it. It would have been “Mueller” back in 1860 when our family arrived, but it is now “Muller”.

💬 Hon Member: Surname validation.

Yes, thank you for that contribution. I am rising to speak similarly reluctantly, really, to the Christchurch City Council (Rates Validation) Bill. I acknowledge your ongoing interest in this topic, Mr Deputy Speaker, and also that of the many thousands of people in Christchurch who will be sitting on the edge of their seats waiting for this piece of legislation to finally get through here this evening. I do want to acknowledge the Hon Nicky Wagner.

💬 Stuart Nash: They’ll be asleep if they listen to this speech.

I will amp it up shortly; we just want to start slow. So, well done for your contribution, Nicky Wagner. It is obviously something that needs to be done and I thought you articulated the rationale for that very well. I also acknowledge, again, Scott Simpson for his leadership of the Local Government and Environment Committee and the way we have managed this issue through as a group.

As I am sure we all know, the bill that is in front of us this evening is the Christchurch City Council (Rates Validation) Bill. Its purpose is to correct an administrative anomaly. Unfortunately, there is clear precedent for this. We have been here before. Maybe this is a South Island thing, I do not know, but we were here a year or so ago for the Tasman District Council (Validation and Recovery of Certain Rates) Bill. That obviously was passed to fix some retrospective administrative errors. I guess—if we are to be very generous in our outlook—we could say that local government is particularly complex. We have 67 territorial authorities, 12 city councils, 53 district councils; six territorial authorities—Auckland Council, the Chatham Islands Council, Nelson, Gisborne, Tasman, and Marlborough—are unitary authorities, and I guess with all of this complexity there is going to be the occasional error. I guess one argument—and we have heard it particularly from the other side so far this evening—is that, you know, this happens infrequently, human errors can occur, and when they do it is appropriate for us to get together and fix them, which is what we are doing this evening.

Essentially, the assistance that we are collectively offering tonight is because the council failed in its rates resolution to state that the rates were payable by instalments, what the payment dates were for those instalments, and what penalties would be added for late payment in these and previous years. The administrative breach, to be technical for a moment with respect to the bill, is a breach to the Local Government (Rating) Act 2002, mostly around section 44, “Notice of rates assessment”, and section 45, “Contents of rates assessment”. The relevant part here, for those in the House who are particularly interested in this detail, is section 44, “Notice of rates assessment—(1) A local authority must deliver a rates assessment to a ratepayer to give notice of the ratepayer’s liability for rates on a rating unit. (2) A ratepayer is liable for rates on a rating unit when the local authority delivers the rates assessment for that unit to the ratepayer.” So that is section 44—[Interruption]—for a moment there I thought I was going to get a point of order that might have stopped me.

💬 Hon Ruth Dyson: That would have required me to have been listening.

You are following this and enjoying it, no doubt. In section 45, “Contents of rates assessment”, the particular part here that caught Christchurch city was “(m) the methods by which rates may be paid and the date or, if the rates are payable by instalments, the dates by which specified amounts must be paid: (n) if applicable,—(i) the penalty regime of the local authority; and (ii) a warning that, if rates are not paid on time, a penalty may be added under that regime:”. So, as you can see, this is a complex process. The city council in many respects, as we have heard this evening, was trying to simplify that, but in its enthusiasm to make the rates setting process more easy for its constituents to understand it missed a pretty critical part in that process.

I did a rough count on the amount of ratepayers in New Zealand. There are roughly 2 million. If each ratepayer receives a quarterly rates assessment, that is about 8 million rates transactions that occur. So I guess, again, to be charitable, if you look at this particular error in the context of New Zealand as a whole, it is not extraordinary that we have to be here tonight. I do have a lot of sympathy with the sentiment that our chairman, Scott Simpson, has articulated this evening on two points. Firstly, we do expect that officers of councils are familiar with a ratings Act that came in in 2002 and would have the appropriate internal controls to ensure that they are following the correct process accordingly. Secondly, when an error has been found and you are asking Parliament to make a change to validate you and to essentially get you off a hook, you would expect some degree of contriteness, and I think Scott, the member for Coromandel, summarised that very well. I was, like him, very disappointed that there was not a sense of acknowledgment that Christchurch City Council had to put the Parliament through a process when, quite frankly, our collective wisdom could be well focused on things other than this. I was disappointed that when we flew down to meet with the council there was a degree of offhandedness in respect of the way it was approaching this particular issue.

What you would also expect in this debate—and I am sure we are going to hear it shortly with my good friend and colleague Mr Mark—is a reference to the role of auditors. I just thought I might get in first here because I have heard him speak very eloquently on this before—perhaps because of his passion for local government—saying that somehow if the governors and officers of a particular local council slip up, then really it should be the auditors who pick it up, and really it is the auditors who should be hung out to dry. Of course, they are a key part of it, but I do hope that the governors of a particular council and the officers of a particular council do not take the approach that actually they can do the best they can but it is really the job of an external auditor to pick up the things they miss. That is not what best practice is. It is nowhere near best practice. There should be a strong internal audit function. There should be a good mix of governors and officers participating in that internal audit process and they should have the capacity, capability, and focus to ensure that they pick up these errors, and not have an approach that says that if they miss something, an auditor should cover it for them.

In that regard it was very positive to see that the Society of Local Government Managers has identified that there is room for improvement. We saw that in the report back from the department and the various work that is under way to improve councils’ practices with respect to setting rates resolutions. I was very pleased—and I am sure the various members of the select committee were very pleased—to see that work under way, not before time. We have an expectation that the officers of councils are at the very best level of best practice and process. We really should not be in this position again of having to cover up for administrative anomalies. With that, I would like to add my somewhat reluctant voice on this side of the House to this particular bill, the Christchurch City Council (Rates Validation) Bill, and will remain very interested in the ongoing debate as it occurs over the next hour. Thank you.

Like others in this House, I rise reluctantly to speak on the Christchurch City Council (Rates Validation) Bill. The average daily cost of running this Parliament is over half a million dollars and the average bill costs $1.43 million, according to the Parliamentary Library. So this local bill, promoted by the Christchurch City Council, is a very expensive way of fixing errors that the city council could have avoided.

As others have noted, the council breached the Local Government (Rating) Act 2002. It made mistakes in the way it worded its rates resolutions in relation to the payment dates for rates, the authority to impose penalties on unpaid rates, and the targeted rates for Church Bay and Governors Bay. The council was certainly trying to simplify the resolutions, but these mistakes continued for 10 years. Although the bill attracted only one submission, even though it is retrospective legislation, it is probably uncontroversial because ratepayers do not engage with the minutiae of rates resolutions and because the actual rating demands that the council sent out were correctly worded.

So the council has made mistakes, and I share with other members the concerns about the offhand way in which its officers presented to the select committee, but the city council in its long-term plan for 2015-25 is proposing to make an even bigger mistake than the ones that this bill aims to correct. In that long-term plan, the council is proposing to sell off or sell down shares in strategic assets like Orion New Zealand, the Lyttelton Port Co., Christchurch International Airport, City Care, EcoCare, and Red Bus. The dividends from these council-owned companies through Christchurch City Holdings have provided a key source of revenue to Christchurch. They have helped fund the council’s services and its activities, and they have helped to offset rates.

Rates in Christchurch have been lower than in Selwyn and Waimakariri, which are neighbouring councils. They have been lower than in other city centres like Hamilton, Wellington, and Tauranga. The cash dividend that the city council will get from these companies in the forthcoming financial year is estimated to be around $46 million. That has the effect of lowering council rates by 13 percent. Those cash dividends have averaged 3 percent in the last 3 years and 4 percent in the last 10 years, and there has been a 26 percent return to shareholders since 1996 because of asset growth and appreciation in capital value. That has been a very good return to the people of Christchurch. If the council proceeds to sell off those assets, the dividends stream will halve.

So it is a very short-sighted decision, which the council is being panicked into making because of the National Government’s reluctance to renegotiate the cost-sharing agreement with the council. It is reluctant to take costly projects like the stadium out of the cost-sharing agreement—off the council’s books—and it is reluctant to re-engage and contribute a fairer share to the costs of repairing the council’s horizontal infrastructure.

The council has come to Parliament to ask us to fix these problems with its rates resolutions—to, effectively, validate the payment dates for the rates and the issues around penalties. It has come to Parliament to ensure that all the money that it has received from the rates that it has levied is lawful, so that it can lawfully go after people who have not paid rates and not face a legal challenge there, but it will not be able to come back to Parliament and ask the House to solve the problems that the sell-off of these strategic assets like Orion, like the port company, and like the airport company will cause. They are problems where ratepayers in the future will be complaining about the rise in their rates because the revenue base for the council has narrowed. It will have to rely much more on rates rather than dividend income, and we will not be able to fix those problems.

The council should be looking at alternatives to asset sales to meet the financial shortfall. It should take a much more rigorous look at its own spending and it should scale back some of the roading projects. It should renegotiate the cost-sharing agreement. We need a much wider revenue base, not a narrower one. I could go on and talk at some length about the problems with mixed-ownership models, but I do not think, Mr Deputy Speaker, you would be comfortable with that.

So coming back to the bill, I was puzzled that the Society of Local Government Managers, the Department of Internal Affairs, and Local Government New Zealand have not done more to improve council practice around rates resolutions, because, as Todd Muller mentioned, this is the third piece of legislation we have had to deal with in recent years where we have had to validate council rates-setting procedures. Belatedly, work has been done to improve practice. There have been seminars conducted. The Society of Local Government Managers is updating and expanding its guide on rates setting. There has been a guide for elective members, which is being set out and developed. But this problem is nothing compared with the problems that will arise if the city council is bullied by Government into selling Christchurch assets. We will be supporting this bill, but we do so reluctantly. Thank you.

It is with a degree of mixed feelings that I rise to speak to this bill on behalf of New Zealand First, and to indicate that New Zealand First will reluctantly—very reluctantly—support this piece of legislation. I said earlier on today that the difficulty of speaking at about the No. 7 slot is that pretty much that all the things you really need to talk about have already been said, and I do not want to bore the House by going through all of the detail and minutiae again. However, that said, there are some things that do need to be said.

We have already heard in the blow-by-blow accounts of respective members of the Local Government and Environment Committee as to the circumstances that brought about this piece of legislation and that brought it to the House. The fact that we are passing retrospective legislation in this House does not sit well with New Zealand First at all—at all. That is a bad precedent. It is something that should not be visited in this House, and the fact that we are doing it for a third time, as has been mentioned, is an indictment on those people who are responsible. I am not going to be so forgiving, in my speech, of some of the things that have led us to this point.

The submission from the Christchurch City Council makes interesting reading, as does the Department of Internal Affairs report to the select committee. There were some questions that were asked by the select committee before I was back in the House in November. It is interesting going through and reading the answers, specifically when the select committee back on 27 November 2014 asked this of the department: “The committee requested copies of Christchurch City Council’s audit reports for each of the financial years involved. The committee also asked for information [as to] who undertook the audits each year; the cost of the audits; whether the audit reports raised any issues with the rates resolutions; and the name of the Christchurch City Council’s Chief Executive at the relevant times.”

It is astonishing when you look at some things. Having been a Mayor of Carterton, I am finding it really quite—I am going to try not to be smug, and I will try desperately, because that is not a good characteristic and we have been seeing too much of that in this House, right up until last weekend. Some of the smugness has been knocked off some faces, but I am going to try not to be smug. But I have heard consistently how super-cities are the be-all and end-all—how economies of scale solve all manner of problems. I have heard so much claptrap out of the mouth of Fran Wilde and the Local Government Commission toadies—and I will call them toadies because that is all I see them as—who said things like you will get the high level of expertise in local government that is required for the future only if you amalgamate all the councils into one. So let us look at this super-city in the south.

This super-city in the south has managed to do something that Carterton District Council, the third-smallest council in New Zealand, has never done. I know from my experience that if you have a competent chief executive officer and competent staff when you are passing the resolutions for your annual plan—in which you lay out the rates, the uniform annual general charges, the targeted rates, and the rates increases—your run sheet tells you, as the mayor, precisely what resolutions you must be passing. Your chief executive officer and his financial manager will lay down very clearly and specifically the requirements of the Act, and those resolutions will be passed and they will be put on to paper, into words, prior to the rates bills going out and prior to the annual plan being finally endorsed and published. Without that being done, the annual report does not get approved.

Yet here is a super-city with all of the power that it can muster to be able to hire the best—and who were the best? Well, going into this report from the Ministry of Internal Affairs, we now know that the mayors were Mayor Moore, Mayor Parker—unfortunately, the Hon Lianne Dalziel came in right at the tail end and has to clean up the mess. But we also have chief executive officers Dr Lesley McTurk and—get this; this is the high level of competence that a super-city delivers—Tony Marryatt.

So who is the chief executive officer who oversaw the bulk of these stuff-ups? Well, it was one Mr Tony Marryatt, who became famous down in Christchurch for racking up Hooters bills when on the Christchurch City Council. It was one Mr Tony Marryatt, who got an $800,000 payout—I am pretty sure it was about that. Looking at Wikipedia, it talks about an $800,000 payout. Mr Tony Marryatt was the chief executive officer at Hamilton who got totally offside with the mayor and the council of Hamilton, and was one of the people responsible for the massive loss that the V8 Supercars races made. It was Mr Tony Marryatt, who caused a high level of anxiety amongst people in Christchurch that resulted in demonstrations and protests with about 4,000 people turning up because he got a $70,000 pay rise. Stop press! Tony Marriott got a $70,000 pay rise as the chief executive officer at the very time he was stuffing up.

Well, I do not want to hear anybody talk to me and my people, the good people of the Wairarapa—least of all the MP for the Wairarapa, who thinks that super-cities are going to bring economies of scale and sharper people into the management—when this is the sort of thing one gets. Carterton has never had to face this. Carterton has never had to come cap in hand to Parliament asking that it validate its rates bills over how many years now because it made these sorts of mistakes.

💬 Stuart Nash: Nor Napier.

Nor Napier, no. Nor Gisborne, no. Nor Masterton, nor South Wairarapa. And yet we have got a whole bunch of people, very learned people, who dare to tell the Wairarapa that it will be better off because it is not capable of managing itself, and tell it that it should be a super-city. Many of those people sit in the Government’s ranks as well. Well, there is a very clear message in this piece of legislation tonight: smaller is often sharper. Smaller is often special—that is why the SAS is only small, because it is very special. Smaller is actually capable of being more focused—

💬 Hon Member: Talk about the bill.

Ha, ha! Look, you learnt a long time ago that great things come in small packages, and you are looking at one of them, right now!

But smaller is actually sharper because the sensitivity levels on mistakes are so much higher. If Carterton increases it budget and overspends by $80,000, on the scale and nature of its budget that is a 1 percent increase in rates. Carterton is highly sensitive to error, highly sensitive to bad reports from the Auditor-General, highly sensitive to its reputation, thoroughly focused, and, more than anything, very aware that if it makes a mistake of this nature its community is going to call it to task very quickly—very, very quickly.

It is an indictment that a city council of this size has made such a glaring error. As Todd Muller has said, I will not hold the Auditor-General’s office very strongly to account, but I will point this out. The audit for Christchurch City Council over those errant years when the errors existed or lay undetected cost Christchurch ratepayers this: in 2004 it cost $168,000 for the audit that did not pick up this error, $187,000 the next year, $205,000 the next year—all the way up until 2011, when they were paying $268,000. In 2013 Christchurch ratepayers paid the Audit Office $292,000 to conduct the audit. Just explain to me: how did the Audit Office miss this? And why is this House sitting tonight, dealing with the errors made by the Christchurch City Council—an offline super-city—that were not picked up by the auditors for $292,000? Thank you.

Tēnā koe e te Mana Whakawā. Thank you for the opportunity to take a call in this debate on the Christchurch City Council (Rates Validation) Bill. For a start, I would like to respond to a couple of points that have been raised by other members during the course of this debate. We heard from Mr Mark the New Zealand First position on retrospective legislation. In fact—I hope I am quoting the member correctly here—he said: “Retrospective legislation does not sit well with New Zealand First.” This is a position that I think most of us in this House would generally agree with, although I would refer to the expert, if I might, the authority on the issue of retrospective law: Professor Albert Venn Dicey, the Vinerian Professor of English Law, Fellow of All Souls College at Oxford. He wrote in 1885 in his seminal work Introduction to the Study of the Law of the Constitution that there is often a very valid case to be made for retrospective measures where they are curative—that is, where they have a restorative or a curative effect. He cites somewhat more archaic legislation than that used by my learned colleague Mr Muller—and I do hope I am saying the surname of the member for Bay of Plenty correctly—

💬 Todd Muller: Muller.

Muller—Muller. Mr Muller cited some of the rates validation legislation that has been passed in recent years in this House, including the Tasman District Council (Validation and Recovery of Certain Rates) Bill and other recent examples. Unlike Mr Muller, who is a modernist, I am a traditionalist. I would go back to the Habeas Corpus Suspension Act 1794 as perhaps a better example of legislation that is of the sort we would want to avoid—that is, retrospective legislation that had, in effect, a monstrous effect on rights and liberties.

The other point I would make to Mr Mark is that although we generally opine in this House that retrospective legislation is abhorrent—or at least something that is not preferred—members may be surprised to learn that actually we pass a surprising number of bills that contain retrospective provisions. I do not have the figures for New Zealand here, but I can tell the member that in the Commonwealth Parliament of Australia a recent study indicated that 20 percent of bills passed contained at least one retrospective measure, and there was a similar proportion in the Queensland Parliament, which is one of the Australian state parliaments that has a better legislative analysis committee. So 20 percent seems to be an average that institutions comparable to our own generally adhere to.

This is a slightly different matter to the Habeas Corpus Suspension Act of the 1700s. In the New Zealand context, section 7 of the Interpretation Act 1999 provides that enactments do not have a retrospective effect. So in our criminal law, section 6(1) of the current Sentencing Act 2002 is very clear that penal enactments are not to have retrospective effect to the disadvantage of an offender. As we all know, this is not a criminal bill; this is a bill that deals with local government rating. It is a local bill, but, arguably, it has been to the disadvantage of the ratepayers of Christchurch in that they have not been well served by the administrative error that was made over a very long period of time by successive officials and councils, during the 10-year period approximately when the procedural matter of correctly moving a rates resolution was taken. I just thought that those matters may be of interest to Mr Mark, given that he is bringing up the issues around retrospective legislation.

This bill is addressing a problem that arose over a long period of time. The Christchurch City Council failed to state in its rates resolutions that the rates were payable by instalment, what those instalment dates were, and that the penalties would be added to the rates if they were not paid by the due date. In respect of the rates from the previous years that remain unpaid by certain dates, it also failed to state when the penalties would be added to the unpaid rates and the amount of those penalties, and this resulted in a technical breach by the council of the Local Government Rating Act 2002. These irregularities have little practical effect for ratepayers in that when we heard evidence during the select committee hearing process in Christchurch, we were not told that there would be an impact on anyone in terms of unpaid rates. So Christchurch ratepayers cannot expect to receive an invoice in the mail as a result of this. This is very much remedying a technical deficiency, rather than being something that has a practical effect.

I listened very carefully to the contribution by the Green member Eugenie Sage. She attempted to, I think, itemise some of the subcategories of rates that are laid out in the bill. These are targeted or local rating measures, in addition to the general city council rates. She mentioned the Church Bay sewer loan rate and the Church Bay water loan rate, but she did miss out some others that I think are quite significant. We have also the Governors Bay sewer loan rate, the Governors Bay water rate, the restricted water targeted rate, the waste minimisation rate, the water fire service connection rate, and the uniform annual general charge. I think it is important to get those all on the record because these are rates that do affect people in those areas. Although the member Eugenie Sage did manage to give quite an extensive itemised diatribe on the perils of the mixed-ownership model within local bodies, I thought it was a bit of an omission that we did not have the full list of the targeted rates that are included in this bill.

This is a position, as other members have canvassed, that we do not like to find ourselves in, but it is important that we remedy this matter. We on this side of the House take the rule of law very importantly. We cannot have a situation where the good, hard-working rate-paying citizens of Christchurch have paid, over a period of 10 years, rates that were not correctly imposed. But I do ask myself the question—and I did certainly when I was on the Local Government and Environment Committee—that other members have posed in this House, and that is around whether we will be back here again, given that in the past we have dealt with these issues in relation to Mangawhai, in relation to Tasman, and in relation to other local bodies.

This is something that we were advised by officials there would be some difficulty in providing a cast-iron assurance for because these are matters that are often detected retrospectively through an audit process. But there was some degree of confidence from the officials—and certainly it left the committee with a degree of hope—that such a situation may be avoided in the future by a more careful policing of those particular provisions of the Local Government (Rating) Act 2002, which prescribes the correct form for councils annually filing copies of their rates resolutions with the Secretary for Local Government, who is also an official in the Department of Internal Affairs.

This irregularity, in terms of the scope of the rating resolutions that were not correctly filed, covers the period from 2004 to 2012. I think this is significant when you look at the number of different chief executives who were in charge at the Christchurch City Council during that time. There were several different mayors. Certainly, we were told by the councillors who came to present at the select committee hearing that there are no current sitting Christchurch city councillors who were involved in the initial error back in 2002. I take from this a lesson that perhaps could be applied, which is that you may have individuals who have a high level of expertise and who are very assiduous and dedicated to their job, but we do find ourselves in a problematic situation where you have insufficient institutional knowledge and processes, including such things as desk files or an intranet that lays out the necessary steps—action checklists and those sorts of administrative tools—to ensure that the council is adhering to the Local Government (Rating) Act 2002 in its entirety.

This is important legislation. It corrects a procedural error. It validates the due dates for the payment of rates. It does validate the dates on which penalties may have been added retrospectively. It validates the uniform annual general charge. Although the funding impact statement, including information about how the charge was to be calculated, is included, this information was not originally included in rates resolutions. So this retrospectively validates that particular issue, and it validates those seven other targeted rates that I listed earlier in my contribution. This is important. It is something that we pass reluctantly. But as I have previously canvassed, it is not unique as an example of retrospective legislation, and for that reason I reluctantly commend this bill to the House.

This is a 5-minute call for the Green Party—Denise Roche.

I rise to take just a short call on the Christchurch City Council (Rates Validation) Bill. We support this bill and its intention to correct an error. I would like to acknowledge the work of Nicky Wagner, as well as the Local Government and Environment Committee, the Parliamentary Counsel Office, and, of course, the Department of Internal Affairs for all the work they have done on preparing the information around this bill so that we can vote on it tonight.

One of the values of the Green Party is to support ideas, regardless of where they originate, and we do need to ensure that Christchurch has a secure and stable revenue base. My colleague Eugenie Sage has already touched on how that revenue base should include the revenue from the assets that the council holds, which should not be sold off. But currently that revenue base is all the more pressing for Christchurch, so that Christchurch can recover.

However, the introduction of legislation that is retrospective should really be used as a means of last resort. We feel that it has been used too often. We have seen it used in the last term—quite recently, really—in two similar situations, for the Kaipara and the Tasman regions. It is obvious that there needs to be clearer guidance from central government about the responsibilities around rating for local government. I am pleased to see that, according to the Department of Internal Affairs and its report to the Local Government and Environment Committee, the Society of Local Government Managers updated its guidelines in November 2013. Hopefully, those updated guidelines, along with the recent audit work conducted by the Auditor-General, mean that we do not repeat these mistakes in other cities across the nation.

As my colleague Eugenie Sage said in her first reading speech, and she mentioned it again tonight, the Parliamentary Library research has shown that the average bill considered by Parliament costs us, the taxpayer, around about $1.43 million, and every hour that Parliament sits costs about $20,000—that is, $20,000 an hour to hear these bills. Although we can talk about the cost in money terms, we should also talk about the opportunity costs, and that is another area where this bill has created quite a bit of cost. When we talk about fixing things up from the past through mistakes in the ratings systems and we have to introduce legislation, we are not talking about the other pressing social problems that we have to deal with. And, boy, do we have some to deal with. We have things like increasing poverty, 25 percent of kids living in poverty, median house prices having increased by 60 percent, and New Zealand’s net carbon emissions having risen by 48 percent. Those are the sorts of issues that we could be spending $20,000 an hour on debating. Every minute, every hour that we talk about bills like these is some time that we do not spend addressing the critical issues for New Zealand.

When our grandchildren ask us what our proudest achievements during our time in Parliament were, I doubt very much that this bill, even though it is well-intentioned, will feature at the top of the list. We can, and we must, get things right so that we do not waste time passing retrospective legislation and so that we can spend more time doing the job that we were elected to do—addressing the real challenges that are facing our people and our country. Thank you.

I am pleased to make a small contribution in the concluding parts of the second reading. When preparing my speech I went back to my speech on the first reading of this bill. It is fair to say that I was quite harsh on the Christchurch City Council just around the circumstances where we are now having to put in place retrospective legislation to correct errors and breaches of the law. I am always amazed at the language that is used. For instance, this bill refers to validating irregularities. When you think of an irregularity you think of something that might be like a singular or rare event or just an aberration. Let us not forget that this bill is validating a succession of breaches by the Christchurch City Council that went on for 10 years, from 2003 all the way to 2012. An irregularity? It was a most regular succession of blunders for over 10 years, and it was only after 10 years that it spotted the mistake. I am just absolutely gobsmacked, really, that a major city council in New Zealand went on for 10 years breaching the Local Government (Rating) Act.

I want to acknowledge the contribution from Mr Simpson as the chair of the Local Government and Environment Committee, and I acknowledge his upright and critical remarks, basically, about the Christchurch City Council. I acknowledge him for that because we tend to like to sort of put rose-tinted lenses on over errors with good intentions and correct what were administrative anomalies, but it is what it is: it was 10 years of breaches of the Local Government (Rating) Act. I do not know how big the rating base of Christchurch is, but I know it is enormous. You multiply that by 10 years, and that is a mighty number of rates that were levied, and the resolutions to set those rates and impose penalties on them were basically in breach of the law.

So here we are now using the highest court in the land, Parliament, to correct those errors. I think there needs to be a message that should go out to all local government authorities across the motu—across the country—to step up their game. They need to step up their game to make sure that we are not wasting Parliament’s time having to traverse and go over retrospective legislation to fix up what really are basic administrative errors. I certainly hope that local authorities around the country are as good as Mr Mark’s metropolis of Carterton. I understand that he is very confident in the robustness of the resolution processes that were applied in the setting of rates in his time as mayor. I certainly hope that the other local authorities around New Zealand are doing the same, because if it can happen over the space of 10 years without being picked up even by internal and external audits in the second-largest city council in the country, I just wonder what other anomalies may also be out there among the rest of the territorial authorities around New Zealand.

That concludes my contribution here at this second reading. We are reluctantly supporting this bill, but we hope that the message is loud and clear to all local authorities around New Zealand to lift their game. Thank you.

I am pleased to stand to reluctantly support this retrospective bill, the Christchurch City Council (Rates Validation) Bill. I do want to thank the Christchurch City Council for acknowledging its errors and doing something about them, but to have Government coming in to support it—well, if that is how it had to be, then that is how it had to be.

I want to thank the Hon Nicky Wagner for sponsoring this bill in the House and I also want to thank the members of the Local Government and Environment Committee, ably chaired by Scott Simpson, for the work that they have done around this, and the council for coming to do its presentation to the select committee when we visited about a month ago. This is not just a South Island thing, as one my colleagues said. It has happened with the Kaipara District Council and, again, we intervened there as the Government to just move it along a bit.

I just want to talk a little bit about some of the things that occurred with the council. Each June the council resolves to set the rates payable beginning 1 July annually. Perhaps it might have done that, but there were a few things that it missed. Since 2004 the wording has been the same or similar to that of the past and there were a few minor things like dates of payments, etc., that were missed out. It was not until 2014, when the Department of Internal Affairs was advised of the issues and intervened, telling the council that the resolutions that it had passed—well, it had not actually passed them. It might have actually told some of its ratepayers through other means, but the rates had not been formally passed by council resolution.

So there were no due dates for payment of rates or for authorising of the imposition of penalties for unpaid rates. That was the biggest issue facing this council. Section 24 of the Local Government (Rating) Act 2002 requires that local authorities are to include in the resolution in each year setting the rates the date on which rate payments and/or penalties that are due as well on top of the rates are due, and also the dates by which each instalment is due for payment. That is what the council needed to do and it did not do that.

The information had been included, as I said, in a rating policy and funding impact statement, but it was not included in resolutions, as I said, passed since 2004. Section 57 of the Local Government (Rating) Act enables resolutions to be passed that authorise the addition of penalties—I have started down that road—to rates not paid on or by the due dates. This resolution must be made no later than the date on which the local authority sets its rates for the financial year. It must also state how penalties are calculated and the dates that the penalties are added to the amount of the unpaid rates. So those were technical things that were missed out of the resolutions.

It was also recognised by the council itself, when it presented to us—one of the councillors came to us and talked about these technical errors. Although the information was made available to the ratepayers, it was not included in the resolutions. The council realised the errors and meant to remove them.

I want to read out some of the irregularities. Details of each irregularity around the target rates to be validated by year were pointed out by my colleague Mr Paul Foster-Bell. He talked about the Church Bay sewer loan rate and the Church Bay water loan rate. These are the dates—the years that were impacted on—that were missed out in that particular piece of information. For the Church Bay sewer loan rate the years impacted were 2006-07 to 2008-09, and these are key dates for those people. For the Church Bay water loan rate the years impacted on were 2006-07 to 2008-09. For the Governors Bay sewer loan rate, which was mentioned by my colleague, the years impacted on were 2006-07 to 2012-13, and for the Governors Bay water loan rate the years impacted on were also 2006-07 to 2012-13. For the restricted water targeted rate, the years impacted on were 2009-10 to 2012-13, and for the water minimisation rate—sorry, waste minimisation rate; I need new glasses—the years impacted on were 2008-09 and 2009-10 to 2012-13. The Fire Service water connection rate was impacted on for the years 2003-04 to 2005-06 and 2007-08 to 2012-13. The uniform annual general charge was impacted on from 2003 to 2012-13. These are the dates I needed to place here in this House to finish off that particular area around targeted rates to be validated.

The retrospective valuation is not expected to have an adverse impact, as mentioned by the Hon Nicky Wagner, on the Christchurch ratepayers. It is an anomaly because they already had the information; we just needed to get it into those resolutions.

I just want to talk a little bit more about what we do for local government. The Government, our Government, assists councils with financial management in a number of ways. We do it through our local government reforms. We have better defined the appropriate scope of their activities and have encouraged local government to focus on getting better value for money for their ratepayers, which, as a ratepayer myself, I think is very good. We need to make sure that we get better value for money through our rates. We have also established financial prudence benchmarks, which are required by councils in order to produce their 30-year infrastructure strategies. This is really key for all councils around infrastructure and the strategies on that. I think the Christchurch earthquakes have shown up where the faults have been, and that infrastructure plans and strategies are key to making sure that cities will keep on going through adversity. That is where we had a few issues in Christchurch over infrastructure issues arising from the earthquakes.

Councils also now have to provide information to their ratepayers so that their ratepayers can judge how their council is performing. I just want to say that in the district where our farm is, we have just received a letter from the council inviting us to participate in a panel measuring the performance of our local council. I think that is a really great way of the ratepayers participating in rates within their cities or towns and making sure that they are getting value for the money they pay, as well as seeing what else is happening within their councils in terms of infrastructure and other things.

There has been a big improvement in the past 7 years with rates rises. There has been a big improvement. The average rates rise since 2013 has been 1.4 percent. That is good—good news for everybody.

I realise that I am running out of time, so I just want to conclude by saying that the Christchurch City Council (Rates Validation) Bill is a short bill, a short focused bill. Clause 5 validates the payment dates for the rates. Clause 6 validates the penalties added to the rates. Clause 7 declares that all moneys received by the council in payment of rates and any penalties paid in respect of those rates are to be treated, and to have always been treated, as having been lawfully paid to, and received by, the council. As I said, I reluctantly support this bill.

Unlike many other speakers, I am actually very pleased to be speaking in this second reading of the Christchurch City Council (Rates Validation) Bill. Before I make my contribution on the bill, though, I just want to alert members to the fact that we have been warned already once this week about people falling off high horses. That was in reference to the Northland by-election, but I want to just caution other members about being so critical of the Christchurch City Council in making errors, given that it was only in recent days in this House that we passed a Statutes Amendment Bill that corrected 34 separate pieces of legislation that members of this House had deliberated on through the first reading, through the select committee, through the second reading, through the Committee stage, and through the third reading, and then we had to come back and fix what were, basically, errors. So members should recognise that these things happen.

The challenge for us is to do two things, in my view, when we get a council or local authority saying: “There’s been a terrible mistake. We’ve just been alerted to it. Can you help us fix it?”. The two things that I think we need to do are, first of all, decide whether we should fix it or not. Was the error that has been made made because of genuine reasons? Was it corruption? Was it an error? You know, that sort of call. Clearly, this is an error, and not anything untoward. Then we have to decide, really, that we will fix it, and make sure that it does not happen again—that is the second point. I have heard no contribution from the members from the Local Government and Environment Committee, or indeed from the member in charge of the bill, the Hon Nicky Wagner, about any efforts that were made during the passage of this legislation to make sure that exactly the same thing is not happening somewhere else. Heaven forbid, Mr Muller, it might be in a North Island council.

💬 Poto Williams: Muller.

Muller, sorry. I will just join the people who are mispronouncing your name. Mr Muller insinuated that these errors happen only in the South Island. Kaipara—I am pretty sure that is in the North Island. I am almost positive, actually. That was the most recent one we did.

Just going back to this bill, as the member who—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Going back to it? Oh, sorry.

—just terminated her call, Joanne Hayes, mentioned, it is a pretty small bill. I do not understand why the Minister who introduced it and spoke earlier in the debate said it does not have any impact on any individuals. Clearly it does, because the resolution was illegal. People got their rates bill and they paid it and the rate was set illegally, so it clearly does have an impact on people. We have just decided that that impact is not of such a nature that we would not remedy the fact that the rate was struck outside the law. So that is the reason this legislation is needed.

The first of the two offending parts is in section 24 of the Local Government (Rating) Act 2002. Do you still have to refer to which document it is when you refer to Bound Reprinted Statutes? Is that still the requirement in the Standing Orders, Mr Assistant Speaker? I think it is.

The ASSISTANT SPEAKER (Hon Trevor Mallard): You need to take a point of order, Ms Dyson. Would you like to take a point of order?

It is in Bound Reprinted Statutes Vol 26, at p 534. Section 24, “Due date or dates for payment”, says: “A local authority must state,”—and these are the three key words—“in the resolution setting a rate,—”. So you have to state in the resolution: “(a) the financial year to which the rate applies; and (b) the date on which the rate must be paid or, if the rate is payable by instalments, the dates by which the specified amounts must be paid.” That was the first breach, because the local authority—in this case, Christchurch City Council—did state it on the invoice but did not state in the resolution that information as outlined in section 24.

The other breach was in relation to the same Bound Reprinted Statute, obviously, but this time it related to section 57, “Penalties on unpaid rates”. It states: “A local authority may,”—again, those words—“by resolution, authorise penalties to be added to rates that are not paid by the due date.” Then it goes on to say that a resolution cannot be made later than the date the local authority sets the rates, and the resolution itself has to state how the penalty is calculated and the date the penalty is to be added, and then it talks about the level. So that is the error that this legislation is fixing. It has meant that people in Christchurch, for 10 whole years, were rated illegally. I do not think there is a single person in this House—actually, I do not think there is a single person on the city council, amongst the elected representatives or management—who would be pleased about that. I do not know who made the error, but, as I mentioned earlier, I want to make really sure that efforts have been made by the member who introduced the bill, and also by the members on the select committee, to make sure that the system is in place so that the Christchurch City Council and other councils do not make this same mistake again.

The reason I am particularly keen on that is that I do not imagine, given the intolerance that was demonstrated throughout some members’ speeches tonight—I am not confident that a future plea from another council might not fall on deaf ears. We might not get a positive response from a local member or, indeed, Parliament to retrospectively validate setting of rates or correcting any other errors. What would happen? What would happen to Christchurch if the city council had come along and said: “We’ve discovered this mistake.”? Actually, the Department of Internal Affairs needs a bit of a pat on the back because it was actually the Department of Internal Affairs that found this mistake. Somebody—I do not know what their job is—had been reading the local government rating legislation of 2002 and comparing the requirements in it with the rating resolution from 2003 to 2013 of the Christchurch City Council. Heaven knows what their job description is, but I am grateful to them that they did detect this error, because that was the only way that we were alerted to it.

But if the Parliament had said: “No, we are not going to pass this legislation.”, what would the options be? Well, at the moment the Christchurch City Council is already looking at enough hard options, actually. One of the options that has recently been put out for public consultation is an option in terms of meeting our city’s shortfall of funds—and it is a shortfall because of the debt requirements of the local government legislation—of selling off some of our assets. A lot of people in Canterbury are very concerned about that, very upset, very angry, and we will be doing everything that we can to look at better alternatives. There is a very good reason for that. It is that the assets that our city council owns earn us a lot of money as ratepayers, and that means we have to pay less in rates.

If Parliament had decided not to support this rates validation bill, we would be even further in trouble in terms of facing our financial future and having a shortfall. So I am very grateful, firstly, that Parliament has decided to proceed with this legislation, understanding that the error that was made was not a calculated misappropriation of any sort, that it was a genuine error, and that probably we do not even know who was personally responsible for it. Secondly, I am very grateful for the fact that we are looking at only our current shortfall and we will be able to find better options for our city in its future than selling our income-earning assets.

A number of contributors to this debate tonight have talked about how bad it is to pass retrospective legislation. I cannot imagine any other way of correcting a mistake that has been made than retrospectively. It would be very hard to pass legislation that corrected a mistake that was to be made in the future. That is the point of this. This is correcting an error, and I think Mr Foster-Bell might have some learned contribution to make on this point. But the point I was making, Mr Foster-Bell, is that it is very hard to correct an error that has been made other than by retrospective legislation. It would be very hard to do it looking into the future.

💬 Paul Foster-Bell: Perfectly fair point.

That is right.

💬 Paul Foster-Bell: I don’t disagree with the member.

Paul Foster-Bell and I agree. It is time to quit this debate, I think. We have got agreement on this very point. So I want to just thank members of Parliament for their understanding of the situation that the city council has found itself in, and I look forward to the progress and passing of this legislation.

Kia ora e te Mana Whakawā, huri noa e te Whare e mihi atu ki a koutou katoa. “Reluctance” is a word that we have heard all evening in this debate. What my whakaaro, or my thing about this, is is that I am not reluctant, actually. I just think—and without regurgitating a lot of the kōrero or the discussion tonight—the fact is that it is what it is. We have really confirmed the fact that there was no malice intended and that there was a genuine mistake that was made. The important part of it is that it was a technical issue. And the second part of it is that there were no moneys that were actually overcharged, or whatever.

In the Chamber tonight there were, at one time, three mayors here: one a former mayor—well, all former mayors, actually. One of the things that we have concerned ourselves with all evening in this debate is: given that we have found this mistake, are there any others out there that we do not know about? When this happened, there was a huge flurry across New Zealand, particularly in the local councils, because everyone was then checking their systems just to ensure that this particular anomaly—this particular issue that they found with the Christchurch City Council—was not happening on their patch. So I think that is an important consideration or concern that, actually, we should possibly put away after this debate or be comfortable with it.

As a member of the Local Government and Environment Committee, it was an interesting situation when the councillors came to submit—and it was the only submission on this particular bill. When the councillors from the Christchurch City Council did come before the committee, there was a real interest from all of us because it seemed that they showed very, very little empathy. In some ways, it was in a fairly perfunctory manner that they actually submitted to our process around this bill. But when you take into account that it took place over a 10-year period and quite a number of years before the present council—particularly given what has gone on in Christchurch, as we know, since the September earthquakes and then the February earthquake, and the immense workload that has actually been on the Christchurch City councillors.

As someone who comes from Christchurch, as someone who is a ratepayer, as someone who has experienced the incredible challenges through those earthquake periods, I see the city council working in unison with the Crown. But then in a lot of parts of it you are damned if you do and you are damned if you do not. So this added situation, which happened long before their time, is something that I think was reflected in the way that they actually presented that day. I have a lot of empathy for them because they realised that and they accepted the fact that the mistake had been made. I actually concur with the right honourable Ruth Dyson this evening on the fact that—

💬 Hon Member: Not quite “right”.

Oh, well, the honourable, sorry—the Hon Ruth Dyson. I concur with what she was saying: that if we look at all of this, if we accept it—which I believe we should, and move on—and if we then acknowledge the work that we have done on this bill, and if we acknowledge the fact that the Hon Nicky Wagner presented this as a local bill, and if we acknowledge the work that has been done by the Local Government and Environment Committee, we will actually get to the point where we have actually shored all of this up, and we will have legislation that will actually be good legislation, because good legislation only comes about when we have collective agreement. We have a sort of collective working so that we bring in good legislation to be able to deal with this situation so that it does not happen again.

On that note I do again want to say that it is what it is. We have accepted that. Let us move on, let us deal with this, and let us continue on with other important things that we have to deal with. On that note, I commend this bill to the House. Kia ora.

Bill read a second time.