Rates Rebate (Retirement Village Residents) Amendment Bill

Madam Chair, can I first of all acknowledge your ruling and say that it was consistent with the ruling that you made last week, which I didn’t enjoy very much. But I appreciate the consistency of you ruling, and I think that all members will be quite attentive to the questions that are being put from now on and will make sure that their voices are heard.

I’d like to draw the attention of the committee to two Supplementary Order Papers (SOPs) to the Rates Rebate (Retirement Village Residents) Amendment Bill. But before I do that, can I acknowledge that prior to the election, we had the second reading of this debate and a majority of this Parliament supported the progress of the bill. It was delayed at that time by the then Government, presumably with the intention of ensuring that after the election, they would be able to defeat it, and I am delighted that, actually, the position in support of the bill has strengthened since then. But I want to acknowledge the Māori Party and United Future, which were supportive of this bill prior to the election and have not been returned to this House.

But, regardless, I am really hopeful that we get a majority support and deliver the intention of the bill, which is to give residents who are living in a retirement village with a licence to occupy the eligibility to apply for a rates rebate. It’s a very simple bill—most members’ bills are. Not all that are on the Order Paper tonight are as simple as this, but its intention is very clear.

The new Minister of Local Government has been extraordinarily helpful in ensuring that the issues that were raised at the Local Government and Environment Committee in regard to this bill have been addressed in the Supplementary Order Paper. It’s been hugely helpful, having gone from being a member without a department to being part of a Government that is then helping make sure that this bill is as robust as possible, and that’s the intention of the two SOPs that are presented.

The first one defines with much more specificity the definition of “residential property”, so that it’s very clear that it is just those living in retirement villages who have a licence to occupy and an occupational right agreement. I’m still having a bit of an argument with some people about whether you can have an occupational right agreement and a unit title, and maybe during the next little while—while we debate this—that will become clearer. Particularly, anybody in the House who has experience in property law might be able to answer that question—so, can you have unit title ownership, and can you have an occupational right agreement at the same time?

So the first Supplementary Order Paper clarifies the definition of “residential property”. It then talks about the process for providing the refund to ensure that of course the refund—i.e., the rates rebate—goes to the resident, rather than to the owner of the retirement village. I actually have a lot of confidence that the process of passing through the retirement village owner to the resident would take place, and this just clarifies that, in the end, the owner has to get the rates rebate. They pay the rates through the owner, and they need to get the rates rebate.

There are current examples where territorial or local authorities do refund the money to the owner of the retirement village, who then passes it on to the resident, and to the best of my knowledge—and I have made extensive inquiries about this—there have been no problems. So I’m sure that we can rely on the integrity of the owners to make sure that that happens.

I just would like to briefly mention the second SOP, which talks about the commencement date. Originally, in my bill as introduced, the bill would have come into force the day after Royal assent, and the amendment that is proposed in my second Supplementary Order Paper changes the commencement date so that the “Act comes into force on the day after the date on which it receives the Royal assent, but only for the purpose of rates in a rating year that begins on or after 1 July 2018.” So I think that makes it clear when the rating year will start.

Can I just conclude my contribution on the SOPs by saying that, in my view, every single concern that was raised by the National Party during the select committee and during the second reading has now been answered by these SOPs. I doubt that there is a single contribution that will be made that raises further concerns, and I urge the National Party to move beyond partisan politics and think of the residents.

Many of the electorate members of Parliament have residents in retirement villages who are entirely dependent on superannuation for their income. They would certainly benefit from the money that comes from central government towards paying their rates in the form of a rates rebate. Their constituents—if they are electorate MPs—will be looking to them to stand up for low-income earners in retirement villages, and I would certainly urge the members to look at those two SOPs and support the bill in its final stages.

Thank you, Madam Chair Williams. May I first congratulate the member in the chair over there on the work that has been done to make what is quite a significant improvement to the bill in this committee stage. I’ve only just very recently been able to look at that Supplementary Order Paper (SOP) 10, but without question it goes a very long way towards tidying up some areas that had been expressed as concerns both within the Local Government and Environment Committee and also in the second reading.

Now, I know Ms Dyson to have been a very fair-minded chair when she chaired the Government Administration Committee, and I am sure that we could expect that she would be likewise as she sits in the chair this evening—because I do have some questions still. I mean, there are still some elements of this that I think, in effect, were raised at least in part by officials in the select committee stage that have not really been addressed.

The first of those—because it is tightly defined to a retirement village resident—points I would raise is that those villages, many of which now are the larger ones, are not simply villages; they are a combination of village, rest home, and hospital care for our elderly New Zealanders.

Now, if you were a resident there in one capacity or another—for instance, in the rest home part of that facility—and particularly if you are, even in part, privately funding that care, then without question you too are also sharing a burden of the overall rates for that facility. That individual—and particularly if they’re paying privately or partly privately—is bearing part of the overall rates burden. Without question, they are in a set of circumstances where they would not be considered to be terribly well off. So the same need exists for those individuals—and perhaps even more so, actually—as for those that do have the right to occupy unit titles or contracts. The bill just simply doesn’t help them.

I would think, actually, given that the mechanism in SOP 10 is placing the onus on the retirement village operator to make sure that the rates rebate is calculated out at an appropriate amount for each of those right-to-occupy holders, that it is a viable thing—certainly feasible—for them to do the same for residents in perhaps the rest home part of the facility, who are still, through their private payments, shouldering a burden, in part at least, on those rates.

That would give relief to people who are also in need. I think the member might want to consider that. It’s surely not too late to look at what could be. I mean, without question, SOP 10 has made quite a significant change and a change for the better. So I’d ask that question to the member Ruth Dyson—to consider that and give us the thoughts on that. I would suggest that simply the fact that it is complicated should not be the reason not to do it. A lot of legislation is complicated. Certainly, I would think—I would hope she would agree that the need is there. We wouldn’t really want legislation that’s either going to create new distortions or not address some of the other ones that currently exist.

But on that subject of the mechanism to affect the rebate through the village operator, I’d be very keen to hear if the member in the chair had actually spoken to an industry stakeholder group, or, indeed, with any of the village operators, as to the extent of the challenge that might present to them to have to work through this mechanism. They are going to have to calculate out for each individual or couple that might be entitled how much each of their respective share might be. They might have to factor in the use of shared facilities, which sit alongside of the unit that they actually have the right to occupy, and so they’re going to have some work to do.

Part of it, in asking the member if she’s had those conversations, is to, obviously, understand what the impacts are, but beyond that is actually what I think we would be loath to see, which is those operators applying an administration fee in the process of remitting the rebate, because they might well argue that there are additional costs that fall upon them to manage that process. It may be true that there are, so I’d ask the member just to reflect on what conversations she might have had or might be prepared to have, because we don’t want to end up remitting less than the full value of the rebate to those residents in need. So I’d just like to leave my questions at this stage at those, but I look forward to more contributions.

Thank you very much, Madam Chair Williams. I can’t add much by way of wisdom around the detail of this piece of legislation that goes beyond that of the member who’s put this up, Ruth Dyson. I’d just like to acknowledge her vision in bringing this bill into the previous Parliament and seeing, obviously, the need to change a piece of legislation that has been around since 1973. Much has changed in those following years, and I think that Ruth Dyson has done New Zealand proud to bring this legislation before the House and to point out some of the anomalies that run through a lot of payments, particularly for elderly people, across New Zealand.

The advent of this new form of retirement village is one that we need to look at more carefully. There’ll be growth in this area. We have to ensure that people moving into these villages have the same fair go and access to support—necessary support, I have to say—as everyone else. The reality is that—and it’s been pointed out in the recent water report—across the country, local government has let its infrastructure run down and pressure will come on ratepayers, regardless of who they are, into the future. We have retirees in New Zealand who have traditionally had a reasonable income and a reasonable standard of living, thanks to a superannuation scheme that has been supported over the years and boosted at times, by both Governments, I have to say—although, safeguarded more by Labour over the years. The fact is that there will be pressure on all ratepayers, and if we are to follow through with the rates rebates scheme, which this Labour Government is committed to, we want to ensure that it goes to everyone fairly.

This piece of legislation from the member does allow that to happen. I acknowledge her efforts and applaud her determination to keep this moving. I’m not going to hold up the committee for too much longer, other than to say that it’s a pleasure to work with someone who came to this House in the same year as I did—1993—and that we still have much to offer Parliament. This piece of legislation will be appreciated by thousands and thousands of people into the future who just want a fair go in their retirement.

Tēnā koe, Madam Chair Williams. Thank you for this opportunity. I find it interesting as a Māori to be standing and speaking on a retirement villages bill, or a bill that, essentially, has a major impact on those in retirement villages, given that a recent report by the Whanganui District Health Board actually says that Māori and Pacific Island people are unlikely to go into retirement village homes.

This also raises another question—just as an introduction to my contribution on this particular bill. The sensible nature of this particular bill, introduced by the member Ruth Dyson, actually makes me think about the rebates mechanism on Māori land and how that, in fact, perhaps is something for other members of this House to consider as a member’s bill—to actually make that a lot easier for those owners of Māori land. I’m one, and I know my tuahine here, Willow-Jean Prime, is another.

But it’s something that I think can be considered when we think of the sensible nature of this particular bill—in particular, Supplementary Order Paper (SOP) 10. The mechanisms by which the rebate is offered back to the resident—I think the SOP sets out a pretty clear way of doing that. That’s important because, quite often, for many of the people who find themselves in retirement villages—for some of them, having read some of the reports and spoken to a few people who are in retirement villages, when they get in there, the last thing they want to be worrying about is some of these (1) financial burdens, and (2) just some of the administration it takes to make sure that they’re not falling into arrears, that they’re keeping up with the payments that are necessary for them to continue to stay in their retirement village. It’s the last thing on their minds. So I think it’s important that this particular SOP actually does set out a very, very good regime.

But I do have some considerations for the member in the chair around the administration of these particular rebates. One of those is actually when there is a member in the retirement village that has given power of attorney to whānau members, for one reason or another—I’m not too sure what the broad range of those reasons might be. But when there is, in this situation, a power of attorney—I wonder if there was any consideration, when the member considered this particular SOP, of whether there are any legal implications, or if there are any pitfalls, or if there are any ways that that particular person with power of attorney can be tripped up in dealing with (1) the retirement village, and (2) the local body council on behalf of their family member who’s in the retirement village. It’s just something that I didn’t see in this particular SOP or in some of the research that I was doing on this particular bill.

But for the most part, this bill is pretty straightforward in addressing what is seemingly an anomaly. The member the Hon Damien O’Connor has already mentioned how outdated the original Act is. It is important to remember that Māori and Pākehā alike are living longer. They’re living longer, and we want to make sure that for those who do intend on putting their families into retirement villages, it would be an easy process for them.

If I can raise just another challenge for some of the members, around how the health system and retirement villages in particular are actually catering for Māori and Pacific Islands people’s needs—but I’ll leave that challenge just on the floor, as an open topic of discussion for another point in time, perhaps.

But otherwise, it is a relatively simple bill. The question that I have to the member in the chair is just around the power of attorney for families. Otherwise, I look forward to further continuing this debate on this bill.

Can I just thank the members who have contributed in the debate so far. It’s really interesting and it’s great to have a topic that I’ve been involved in for so long debated in the House.

Can I, first of all, respond to the questions from Brett Hudson. I don’t think Mr Hudson was on the Local Government and Environment—no. Mr Hudson and I were on the same select committee, but I thought he may have been on two as well. So, in terms of the people who may still be missing out on rates rebate, I think that’s very worthy of consideration, and both Brett Hudson and Peeni Henare have raised that question.

I don’t agree with the proposal that rest home residents are in the same situation as a resident who’s in a retirement village unit, and that’s because a rest home resident does not have an ownership stake in the room they’re in. When they leave, they take nothing with them in terms of ownership. If you’re in a retirement village unit and you leave, you get a percentage of the money that you put into it. The owner of the retirement village takes their cut, but you actually get the rest. So if you say, “I’m sick of this retirement village, I’m going to move to Christchurch, because that’s a much better place than anywhere else in the country and I’m going to get a retirement village unit there.”, you would sell your retirement village unit and take most of the money and you could buy another unit in a better city than you currently live in, if you’re not living in Christchurch. So it’s really the ownership stake that, for me, is the difference between a rest home resident and a retirement village unit person with a licence to occupy.

The trick with this bill is really brought about by the fact that when Norman Kirk introduced this scheme in the 1970s, there was no such thing as a licence to occupy, an occupational right agreement. People either owned or they rented. That was the way the world was in the 1970s. So the legislation has not kept up with the change in property status, but that’s the anomaly that this bill seeks to fix.

In terms of the second point that Mr Hudson raised, which was the passing on of retirement village owners, I have had discussions with the retirement village owners association, the Retirement Villages Association. I’ve had discussions with individual retirement village owners about this very issue. They are 100 percent supportive of it. Their submission, which is on the public record, says that. They have no interest in taking any cut out of this.

Where the local bodies currently give a remission on rates to retirement village residents, in the way that this bill seeks to address, it is a very smooth operation. It’s not a rates rebate; it’s a remission and it’s paid for by ratepayers rather than taxpayers. So anyone from Auckland who’s here should be celebrating, because the Auckland Council is about to get some money back that they have been paying out to residents that they shouldn’t have been. So, Auckland ratepayers, here’s a little gift for you. I’m sure the mayor will be calling me shortly to pass on his appreciation.

💬 Hon Peeni Henare: Merry Christmas.

Yes, it’s a bit of a Christmas bonus. So I hope that answers the questions that Mr Hudson raised.

In terms of the points that Mr Henare raised, there was a review of the rates rebate scheme done in 2007, and it is well worth reading. And the very point that was raised in Mr Henare’s contribution is considered as part of that review, actually: what happens with Māori land—there are a lot of people who have ownership through Māori land status who aren’t beneficiaries of a rates rebate—and what could be done about that? So I’d invite the member to read that review and get a member’s bill into the House in the ballot. There will be one drawn early next year, and, if you’re as lucky as me, yours will be drawn out. I had three drawn out in the last term of Parliament, which is pretty well unheard of. I decided that I was on a winning streak so I went down the road and bought a Lotto ticket, and guess what? I won nothing. Anyway, so I’d invite the member to read it. But that very point that is raised is mentioned in that.

There are other groups that are also missing out: people who are in schemes such as rent to buy. They are counted still as tenants, and I’d be quite interested in looking at whether people who actually are investing in an ownership stake should be entitled to also apply for a rates rebate, and they’re often people on very low incomes.

The final point that was raised that I will respond to was the power of attorney. This has no implications at all. So a person who has financial power of attorney over someone else’s property would still have to receive the rates rebate but keep it in that person’s bank account. They can spend it, because of their power of attorney, but this will make no difference other than they’ll have more money to spend on behalf of the resident.

Thank you, Madam Chair Williams. Firstly, may I commend the member, the Hon Ruth Dyson, for this member’s bill. It is really an outstanding piece of legislation aimed at equal treatment, and that is really one of its great redeeming features.

Might I also say that what this is doing is putting on an equal footing different housing arrangements, and I think that is really important: that where there is a rates rebate we need to recognise that there are multiple ways of owning homes. As the member has noted, whilst this deals with retirement villages, there may be some other areas that warrant attention, and I certainly would commend that to the House. Things like joint living arrangements where the home is owned through perhaps a charitable trust—whilst it might not be immediately apparent that it’s owned by retirees and superannuitants, that nevertheless is the case. However, this is one important step in the right direction.

It’s also worth noting that, you know, retirement villages come in many different shapes and sizes, and certainly in my own electorate we have some very, very large retirement villages, housing thousands of people, many of whom are, to be quite honest, quite well off and probably don’t qualify for this rebate, but equally there are some others that are very modest, small, and family-owned businesses. I can think of one in Ōpawa straight away. Those villages cater to a very important sector—a needy sector—of the community.

So in terms of providing housing, I think sometimes we can focus too much on providing first homes. We’ve also got to be very focused on providing last homes, because we know that some of our older people do not have vast incomes or vast capital, and this is a very useful piece of legislation to make it a little bit more possible to still have a home you can call your own. As the member noted, there is a capital interest in a retirement unit, quite unlike a rest home or a hospital arrangement where you’ll be paying a weekly amount but when you leave that, there’s no capital return. It doesn’t go back on the market and be sold to another incoming resident by whatever arrangement. Rather, it is simply an occupation alone and not any kind of tradable interest in land.

Having said that, the Retirement Villages Act itself recognises multiple ways of having that interest in land. It’s worth noting, and I think the member was asking, perhaps a little pointedly towards me, whether they are mutually exclusive or whether they can run together. So, clearly, a unit title is one form of owning an interest in land. A lease is another. A licence to occupy is another. But you can’t do those things all at once. It’s going to be one or the other. Of course, one of the great things about the retirement villages legislation, and the Retirement Villages Act 2003, is it recognises any number of legal vehicles for a retirement village. The favoured one appears to be the licence to occupy, but a retirement village could be comprised of a number of unit titles or a body corporate or various long-term leases that are recognised as an interest in land. This is neutral, as I understand it, in that regard, so any of those arrangements would qualify.

If I may say, it is worth looking more carefully at some of our retirement villages legislation, as we do this. Certainly, through the Christchurch earthquakes there was some grave injustices as a result of the way in which insurance proceeds were paid out to owners of retirement villages. So whilst this is a very commendable step that irons out one wrinkle in this piece of legislation, in this framework, I commend this House to look a bit more carefully at some other aspects of it. But in terms of simply equal treatment of ratepayers, it’s not much to ask, and I’m exceedingly surprised that members on the other side of the House did not support this bill in its earlier stages. But, certainly, in terms of what we have here, it’s simply ironing out an anomaly. It’s saying that if you pay rates, one way or another you’re entitled to this rebate. And on that basis alone it’s a very good piece of legislation. Well done to the member. I commend it to the House.

I’m delighted to be able to take a call. Thank you very much, Madam Chair Williams. I didn’t think I caught your attention or eye, but tēnā koe e Te Māngai o Te Whare.

The Rates Rebate (Retirement Village Residents) Amendment Bill is actually the first bill I had the opportunity to speak on post maiden speech, in its second reading coming through the House. I just want to pick up on a couple of issues in the two Supplementary Order Papers that have been introduced into the committee this afternoon, and acknowledge the work by the member the Hon Ruth Dyson in adequately addressing some of the questions that came through.

In particular, I just want to turn my attention briefly to Supplementary Order Paper 9, which amends the commencement date to 1 July 2018. I understand that the concerns were—actually, our colleague across the Chamber, the member Brett Hudson, mentioned that he had grave concerns about the compliance costs. I guess the second point that logically flows on from that was whether or not this bill addressed any of the harms or the burdens that may be borne by those entities that would have to amend some of their practices. So I commend the member for introducing this Supplementary Order Paper that, as I understand it, is intended to give those entities and also the local authorities the mechanisms and the time to enable the relevant entities to amend their practices and give it time to come in.

But I was reflecting more broadly on, I guess, the people that will benefit from this bill. I think it was that chap, the 38th Vice-President of the United States—here it is, Hubert Humphrey—“The moral test of a Government is how that Government treats those who are in the dawn of life, the children; those that are in the twilight of life, the elderly; and those that are in the shadows of life, the sick, the needy, and the disabled.” Hubert Humphrey was actually the chief Government whip of his day when he was a sitting member in the mid-1940s in the United States—a member of the Democratic Party—and I thought it must be incumbent upon those that hold the regal title of chief whip to have a real penchant for social justice.

Actually, I just wanted to make a brief note, because I know that the honourable member sitting in the chair this evening, Ruth Dyson, has contributed her lifetime towards fighting for those most vulnerable within our communities. This piece of legislation that’s come through by way of a member’s bill is indeed another instance of that—those that are most needy within my communities, and actually within all of our communities.

The situation that we find ourselves in now is a lot different than it was in 1973. In 1973, in the heydays of Norman Kirk—he was at the helm, and when he introduced—

💬 David Seymour: I raise a point of order, Madam Chairperson. I have great admiration for Hubert Humphrey, Ruth Dyson, and Norman Kirk. However, I don’t see how any of them are relevant to a particular clause on this bill. The purpose of the committee stage is to address specific clauses of a bill.

💬 Brett Hudson: I do believe that that matter is not a matter for a member to raise, but one for the Chair or the Speaker to determine solely.

The CHAIRPERSON (Poto Williams): Thank you. Thank you very much for both your interventions. I believe that the member’s time has expired in any case.

Firstly, I’d like to address the member in the chair, who kindly did respond to the questions that I raised in my last intervention. Look, the first point I would make, Ms Dyson, is that you did point to the very tight definition of the bill, and that is true, but you’re well known to me and other members to be a very capable member—and, might I add, not one without some ambition. So I think it’s quite possible for the member in the chair to seize that ambition and, before the end of this committee stage, to look at amendments that might look to remove these distortions and pain of costs on other New Zealanders outside of retirement villages.

As the member did note when she was talking to Mr Henare, there are situations outside of retirement villages, such as people who are in rent-to-own situations. I would draw the member’s attention to the prospect that there are some New Zealanders out there who are not in particularly strong financial circumstances and might be in leasehold land arrangements. That raises the question, which I put to the member in the chair, about how leasehold arrangements fit in terms of rates rebates.

Well, actually, I had a look, and it is possible—not by default; by default, whoever is the owner of the land has the rateable unit and therefore has the rates account—for leasehold arrangements, for the rating unit to go to the person that owns the building instead, but it doesn’t happen by default. That is something that I think the member could look at to incorporate people who are in those sorts of situations, but also look at that measure of making sure that it’s not an onerous thing on the owner of the building, or the occupier of the building, to have to deal with.

That raises my new point, with respect to retirement villages, and that’s in clause 5 in Supplementary Order Paper (SOP) 10, which inserts section 7A. If I note, in section 7A(2): “A resident may apply for a refund of the amount”—a resident may apply. The member has a great intent with this bill, which is to help people who are bearing a burden of rates and who, if they were not in retirement villages, if they were living in their own homes with their freehold titles, would be entitled to some level of rebate on those rates. Through SOP 10 she has sought to tidy up a lot of the measures that caused concerns in the select committee stage, and also in the second reading—that is true.

But as the SOP stands, it places the burden on the occupier, the person with that right to occupy—that they have to be aware that they could be eligible for a rates rebate, even though they don’t actually pay those rates directly, from their local council. Then they must take the steps to determine their eligibility and then go through the process, through the filling out of forms and other steps that are set out in this SOP. That resident has to go through and take those steps to then possibly get a remittance back through the retirement village operator.

There’s no doubt that if they meet the criteria and they do those forms, very clearly, they would receive back that rates rebate. But I would suggest to the member that actually it would be a more workable and perhaps a more equitable—certainly a fairer—situation if the onus weren’t placed upon those occupiers in retirement villages to have to know what they might or might not be entitled to. Even if it were as simple as their operator having a duty to advise them of a potential entitlement, then they could then follow the rest of the steps.

I just think—given we are looking to help people who are in tougher economic circumstances than some other New Zealanders, given we feel that they warrant the rebate that other New Zealanders in similar circumstances outside of retirement villages can and do receive—that, really, we should look at the possibility at this stage of how we can make it as easy as possible for them to understand that they have a potential eligibility, and make it easy for them to get it. I think, Ms Dyson, that would actually strengthen your SOP. Even a small clause might just strengthen that and make it so much easier for those residents to be able to enjoy the benefit that you are seeking to give them.

Thank you, Madam Chair Williams. It’s a pleasure to be able to take a call on the Rates Rebate (Retirement Village Residents) Amendment Bill. I acknowledge the member, the Hon Ruth Dyson, in whose name this proposed legislation comes before the House. I myself was not a member of the 51st Parliament, and so I didn’t have such complete access to discussion at the previous stages, including at the select committee stage. I was, however, a lawyer practising in the realm of property law, primarily, in that three-year period, and so I do have some degree of qualification and experience to speak on particular aspects of this bill.

A previous contribution has claimed that the bill is aimed at equal treatment, but I think it is worth noting that a rates rebate mechanism is inherently an unequal treatment, for very good reasons, of course. We don’t resile from the fact that the bill is well intentioned in seeking to alleviate some financial strain on vulnerable members of society, but it’s worth noting, perhaps, that a rates rebate is not available to all, by definition, and, pertinently, in relation to the specific clauses of this bill that we are considering now, it’s not equal even within the age bracket of those who might traditionally be in retirement villages.

I note that, while the general policy statement of the bill states that residents of retirement villages with occupation right agreements—or licences to occupy, as they are also variously known—in most circumstances pay rates indirectly rather than directly to the local authority, in fact, in my experience, it would always be the case that rates amounts would be paid indirectly. I’m not aware of any situations in which a person who is occupying a unit would be required to pay rates directly to his or her local council, because, of course, the ownership of the unit is the relevant measure for accountability and liability for payment of rates, as was observed by my colleague Brett Hudson, in far more eloquent fashion than I have just done, a few minutes ago.

So it seems to me, then, that rather than the focus on creating a complicated arrangement that requires a local authority to take note of who has been the underlying figure behind the payment of the rates amount, instead the local authority should simply only have to note that the rates have been paid, and perhaps it might be much more logical for the retirement village to be able to claim a rebate in the first instance, and, if so, to pass it on to the person who is occupying the unit.

I will also note that it is, in fact, required by law that persons entering into licences to occupy or occupation right agreements are advised by a suitably qualified lawyer. That lawyer certifies that he or she has provided such advice, and that would be a stage at which I would expect the lawyer would advise his or her client about matters such as outgoings—sometimes known as operating expenses—in relation to the licence to occupy. If it is the case in this individual contract known as a licence to occupy that the person who is occupying the unit has responsibility for, essentially, meeting that rates amount, that rates responsibility, then that is something that should be disclosed, must be disclosed, and I am sure invariably is disclosed, and, as such, is a matter of private contract between the person occupying the unit, if they should wish to sign such a contract, and, of course, the retirement village itself.

Also worthy of note is that such contracts invariably contain a so-called cooling-off provision—the ability for a person who is in that position of signing or potentially signing such a document to reconsider his or her position before it becomes effective and fully binding. My time is running out on this occasion, but I would be interested to hear the member’s comments on any of those aspects that I have raised.

Thank you, Madam Chair Williams. It was actually quite an honour and a privilege to hear from Brett Hudson that he would like to see people getting what they are entitled to. I would like it to be noted that in the news over the past few months we did indeed see I believe it was leaked documents from staff at Work and Income who had the directive key performance indicators to kick people off the benefit—i.e., not getting what they are entitled to. So that would very much be a signal in the shift of the culture inside the National Party and we very much welcome it, so I’d like to leave that point there.

💬 Hon Phil Twyford: Long overdue.

CHLÖE SWARBRICK: Very much long overdue and a point which I am hoping to—and know that this Government will indeed be enacting as a matter of Work and Income culture.

So to bring it back to the bill, and to move my comments away from the points raised by Brett Hudson, I was pondering this bill actually the other day at dinner with my partner’s grandmother, who lives in a retirement village, and asking her for her opinion on it. She lives in Auckland and actually currently gets the rates rebate as provided by Auckland Council. The very purpose of this bill, as has been noted by a number of different members, is to provide an equity in that rates rebate to fix an anomaly in the law, which currently means that those who are living on lower incomes, perhaps down the road from those in retirement villages, are currently able to get a rebate that those in retirement villages who are on lower incomes are not able to get.

But so too currently is there an issue of geographic inequity. As I spoke about in the second reading, currently those living in retirement villages in Auckland, Kāpiti, New Plymouth, and Thames-Coromandel are able to receive those rates rebates, where those living outside of those cities are not. My question to the Hon Ruth Dyson would be whether there has been much consideration given to the changes that may happen, or the processes that are currently undertaken by those different regional authorities, and whether there would be much change in those processes, given the mechanisms as outlined particularly in those Supplementary Order Papers.

I also welcome—and the Green Party welcomes—those Supplementary Order Papers, which give a definitive outline of the machinery that would be used in order to provide those rates rebates, which, hopefully, quells the concerns of the National Party as were voiced, obviously, at the second reading, but so too in the majority report of the Local Government and Environment Committee.

So we are hoping that this bill, obviously, passes through the House, but I would very much like to hear the Hon Ruth Dyson’s opinion on whether she had asked or spoken to those different regional authorities about the impact that this bill would have on them and their current processes.

Thank you, Madam Chair Williams. I take great pleasure in talking on a couple of points within the Rates Rebate (Retirement Village Residents) Amendment Bill. I would like to look at Supplementary Order Paper 10 in the course of the time I have today in the committee. It’s interesting to note that it was back in 1973 that the Rates Rebate Act was first passed with the purpose of providing financial relief to those people. I note, in that context, that over 50 percent of retirement village people in those places are now solely reliant on superannuation, so this is no doubt coming as welcome relief to those people who are living on restricted incomes.

I have also noted that during this time that there weren’t really retirement villages as such with licence to occupy status, so that’s why we need to be able to move with the times by providing this bill. In 2007, we saw that the report of the Local Government Rates Inquiry noted that this area, in particular, needed to be addressed, so I wish to acknowledge Ruth Dyson in this excellent work, which I know is well needed. In fact, in my time during the election campaign, it was an issue raised in Hutt South consistently during candidate debates held at retirement villages. I acknowledge my colleague over there Chris Bishop, who was with me alongside, and I’m encouraged to note that he was very enthusiastic when responding to your bill as well, and the good work that it would do in that space.

But I do wish to follow up with a question. There were a number of people who didn’t clearly know whom responsibility lay with in terms of informing people of their rights for a rates rebate when they were residing in a retirement home. That’s what I’m interested to ask of you at this time—to know whether it is the retirement village owner, whether it’s local government, or whether there is another person with responsibility to ensure that everybody who is eligible for a rebate under this bill is fully informed of how they go about that process. If this is available, it is only fair that all those who are entitled take full advantage of that rebate.

It’s interesting to note how much times have changed since 1973. For a start, most of the new Labour MPs weren’t born. There’s been a big change in terms of retirement villages—360 of them, in fact, with 34,000 New Zealanders, and 80 percent of these currently don’t qualify for a rates rebate, because of the licence to occupy status that this bill looks to affect. It’s important to take note of what this does in terms of the housing crisis that New Zealand currently faces. It’s an important note that we need to make residential care for elderly as affordable as possible. I know there are many in Hutt South who live in large, four-bedroom homes who would like to retire to a more manageable property, but it’s often the costs that stop that move.

I know this is a small change, but it does take a step in the right direction of making elderly residential care more affordable to those who want to take advantage of it. We need to look at the flow-on effects of that. Making bigger homes available to New Zealand families will be a flow-on effect, by making residential care for elderly far more affordable in this space. I think that that is an important note to be looking at—the need for families to have homes and the need for those to be able to move in that space.

When we spoke at the candidates debate to residents of the Bob Scott Retirement Village in the Hutt, we received a number of questions from those Hutt South voters in terms of when they would see this change implemented and when they would see some relief in this space that they were not able to take advantage of, compared to those who own their own home. There was keen interest in that space to know when a clear decision would be taken. So I am heartened to see this great piece of legislation coming into force in the near future to enable those people to have clarity in knowing when they can get a rates rebate and giving them full access to the advantages that other homeowners do have. Thank you.

Kia ora, Madam Chair Williams. Thank you very much for the call. I rise on behalf of New Zealand First to support the Rates Rebate (Retirement Village Residents) Amendment Bill, and I thank the member Ruth Dyson for continuing to support the bill through the House and for bringing it to the House’s attention in the first instance.

I want to pick up on some of the comments by the members of the Opposition around the rates rebate, about recognising that it’s targeted support for those that are in need, and so on, and about why this bill is so important. But can I just read, firstly, just a small quote from the Auckland Council’s website around rates rebates, because it’s of value. “Property rates rebate thresholds”—because I want to be clear about the thresholds that are required here. “The income threshold is $24,790 per year, but you may still be eligible if you earn more than that. Additional income allowance for dependents is $500 per dependent.” That’s $24,790 per year per one individual. Now, can I be clear that this affects more women than it does anybody else. There are more women who are living alone and having to pay these expenses, just because they tend to live longer. “You [may] need to provide evidence of income to assess your eligibility and the amount of your rebate.” So it’s just not a given. That’s the other thing I think we need to recognise—there is a process by which you have to prove eligibility to get the rebate.

I also just wanted to make sure that we pointed out—and these are some of the building costs that we are seeing in today’s environment for our older citizens—that in Franklin and Rodney, for example, when the rates rebate was originally introduced, they didn’t have water rates. That was part of their general rate. Since they have been pulled into Auckland City, that has been separated out. Their rates have not dropped. Their rates have continued to go up, and this affects those that are living inside those brand new retirement villages, now in Franklin and also inside of Rodney and Warkworth. On top of the standard general rate for which they can gain a rebate, they now have water rates.

Because it’s been raised about how this is a subsidy for some, I wanted to point out that the average rate in, let’s say, Warkworth in Auckland is $2,618 per year. The maximum rebate that anybody—a single individual, generally a woman, on $24,790 per year—can get is $620. That’s $12 a week. This is a support. This is a reaching out and a recognition by this Parliament that this is a support that our older citizens need. Nobody is denying that there are other citizens in different situations, and tomorrow we’re going to see an announcement by this Government to actually support those other citizens in their circumstances and in ways that are meaningful for them. But one of the other things—[Interruption] Well, it’s Thursday tomorrow, isn’t it? I’m pretty sure you knew that, Mr O’Connor.

But one of the other things that I think is important is that once we’ve addressed this—and this has been an issue for our older citizens for a very long time—one of the other things we have is actually that rates rebuilt threshold; that’s $24,790 per year. What we’ve had is we’ve had rates increasing through the roof. We’ve had the superannuation attached to the Consumers Price Index—thank you very much, New Zealand First—at 66 percent. Those two things have continued to go up, but the threshold has not gone up at the same counter. And it will affect the citizens inside of these retirement villages over the next few years. As their superannuation has continued to increase—and let’s remember that their water rates have increased, their food has increased, and their power has increased, which is why their winter energy payment is going to be so important when we announce it tomorrow—the threshold has not increased at the same level. So somebody three years ago might have got $500 for the whole of the year, but this year will get nothing.

So there is another thing to address, and while I absolutely applaud the Hon Ruth Dyson for picking up on this issue, which is an issue, there is another issue that needs to be addressed. I don’t think this will be the last time that we are discussing rates rebates in this term of Parliament. But, look, New Zealand First endorses this bill. Thank you very much for giving it your attention, and we look forward to supporting it through all stages.

Thank you, Madam Chair Williams. I’d actually like to address the Hon Tracey Martin’s sudden discovery of fiscal drag—the thresholds that she alluded to. Of course, New Zealand First did support that in our tax legislation, but we understand they’re going to vote to get rid of that tomorrow. Fiscal drag’s a very important economic driver of costs, and it’s something that should be addressed on a regular basis. That’s why we passed that legislation in a tax bill.

However, I’ll go back to the bill that we’re discussing today, the Rates Rebate (Retirement Village Residents) Amendment Bill. I commend the member Ruth Dyson for the Supplementary Order Papers (SOPs). I think SOP 9 would actually help the industry and residents prepare for that. That’s great. It’s a really important piece. SOP 10 does, I think, go some way towards the issues that were identified in the Local Government and Environment Committee process. You know, we did have, of course, the officials, even the parliamentary counsel, pointing out that the bill was unlikely to actually achieve its purpose, and shouldn’t proceed because of unintended consequences. I wasn’t on that select committee, so I’d really like some feedback from the member in the chair, Ruth Dyson. Does this actually address those unintended consequences that were raised by officials during the select committee process? For those of us who weren’t involved, that would be really important.

I think the fiscal cost of this, actually, is also quite significant. While it’s only $56 million, I think, from memory, at the moment, what this bill would address would be something like 10 percent of that, if my memory serves me right. But we’re predicting our population of people over 65 to increase from 700,000-odd to somewhere between 1.3 and 1.5 million people by 2046. That’s a significant increase, but what’s more important is it actually goes from 12 percent of the population to 23 percent of the population, so you have a much greater number of people to be serviced or supported by fewer people who are out there in the working-age population. So I wonder if the member Ruth Dyson has thought about that. I would like to hear her thoughts on that issue.

It is a complex process to apply, and I don’t think this SOP actually truncates that or makes it any simpler than it was prior to the SOP, should it be adopted. So I wonder if there’s been much thought put into that. I’d appreciate hearing from the member in the chair; that would be really important.

I don’t think anyone in this House disagrees that we are trying to help people, and I think that’s really important. What it appears most of my colleagues on this side are doing is really trying to point out that we want legislation that works, that is easy to access, and that actually reaches the target that it’s intended to reach. Rather than just being a sort of helicopter approach, we want a more surgical approach that actually meets the target, meets the aims that we all want.

As I said, we are an increasingly ageing population. In my own electorate, 22 percent of the population is over 65, one of the highest rates in the country—and why wouldn’t it be, of course, because Marlborough’s such a fantastic place for people to retire to. It’s a Mecca—it’s a Mecca.

💬 Hon Member: Oh, more advertising.

Yes, of course, advertising.

💬 Hon Member: Plenty of wine to drink, apparently.

Well, that’s right. They’re over 21, or over 18; they’re quite entitled to go to a winery and enjoy a nice glass of wine and then go back to the retirement village. So I look forward to hearing some answers to my questions. Thank you for the opportunity.

Thank you, Madam Chair Tolley, and welcome to this debate. I’d just like to answer questions that have been raised by the last few speakers, starting with Christopher Penk. He asked particularly about the arrangements and how—I think “complicated” was the way he described them. I know this is a little different in that there is a third party involved rather than just straight owner and the local authority, but the Local Government and Environment Committee received submissions from the Society of Local Government Managers; the Retirement Villages Association of New Zealand, which is the representative of the owners; the Retirement Village Residents Association of New Zealand; and Grey Power, all of whom supported the bill. They had some concerns, which, in my view, are addressed by the Supplementary Order Paper—could have been addressed by the select committee but weren’t—and they are very keen on making it work and making it work in the best possible way. I know that our local authorities are as well. They administer rates rebates for thousands of people already. It runs very smoothly, and there’s no reason at all why, particularly given the goodwill that’s been demonstrated, this won’t work as well. So I understand the concern that he’s raised, and I’m confident that it won’t be delivered. I’m confident that we’ve got players on board to make sure that it works really smoothly.

The Green Party member Chlöe Swarbrick raised the issue of the current rates remissions, which are given by four local authorities, and how this bill passing might impact on that. I think it’s a very valid question. I can’t say what Auckland Council, Kāpiti, Thames-Coromandel, and New Plymouth will do with their rates remission schemes—that’s a matter entirely for them—but it would be my prediction that once this legislation kicks in and covers their area, they will say, “Our remission scheme is no longer needed.” That would be my prediction, but it’s actually up to the councils in those four areas. At the moment, they are filling a gap that has been left by the Government, and once this Government fills that gap, it would be my view that they would be able to back off. Otherwise, the retirement village residents in those four areas will be advantaged compared to people in other parts of the country, and, actually, if you want to attract people from places like Christchurch to Auckland, a financial incentive might be a good place to start. It hasn’t been successful yet, but it may well be in the future. But that is up to them to determine.

The Hon Tracey Martin asked about the threshold level, and I think that she’s entirely correct. The National-led Government did nothing for nine years to update the rates rebates scheme, and I think they could have. Now, with a new Government, it’s an opportunity to have a look at the rates rebate scheme again—so is it fit for purpose, who else is missing out, what are the levels, and do they need adjusting? So that’s an opportunity, and the Hon Nanaia Mahuta has already shown an immense amount of interest in this area, has been very supportive to me and the work that’s been done on this bill, and I have no doubt that she’ll progress it further.

Stuart Smith asked about unintended consequences. I can assure him that the only place further to go on the Supplementary Order Paper, in terms of defining the residents who will be entitled to apply for a rates rebate, would be to name them in a schedule. Seriously, the Supplementary Order Paper to this bill is belts and braces and beyond, so I’m really confident that any unintended consequences will not be delivered. This is sounder legislation than when I brought it to the House; that’s to be expected. I had the support of officials. That was denied to me at the select committee, in quite an unusual manner, should I say, but, as a result, I’m confident that it will deliver what is intended, which is giving residents with occupational rights agreements in a retirement village the right to apply for a rates rebate. It works for me, and I hope soon it works for the National Party.

Thank you, Madam Chair Tolley, for the call on this very good member’s bill. In my call, I just want to talk about one of the very good submissions that was received by the Local Government and Environment Committee and then address some key points that arise out of Supplementary Order Papers (SOPs) 9 and 10.

Before getting going on those, though, I do just want to pick up on one point that’s been raised in debate by members of the Opposition, and that is the notion that, somehow, it’s going to be overly bureaucratic for those people in retirement villages who will be eligible under this piece of law to fill out a couple of bits of paper to make it happen. The point that I just want to put on the record for those members is that in local government authority areas where there is currently a rates rebate scheme operating, that is exactly what people have to do now. I have to say that for those people, those older people on fixed incomes in particular, the prospect of having some support, to the tune of maybe $400, $500, $600 a year, is plenty of incentive to pop on down to their local council office to get the forms to make sure that they are eligible under the schemes that those councils run. I know that personally, from having worked in a local board office in Auckland. So I don’t see that as being an issue at all. Of course people expect have to confirm their details when they are going to be in receipt of support like this, and I don’t see that as being an issue at all.

One of the very good submissions that we received from the Property Council of New Zealand—well-known crusaders for social justice in our times—made a very, very good point. They noted in their submission—this is paragraph 3, point 2; this is fundamental to the bill, really: “The Bill promotes equitability.” As the Hon Ruth Dyson noted in her first reading of the bill, about 50 percent of residents in retirement villages are entirely dependent on New Zealand superannuation. I think this is a point that maybe has been missed a little bit in debate and in public understanding. There’s a little bit of a perception that nearly everyone who is living in retirement villages is pretty flush, and, actually, that’s not the case, and this points it out: over 50 percent of those people are reliant on New Zealand superannuation. Now, that is not a great deal of coin to live on, and what we do know is that, either directly or indirectly, every single one of those people on a very, very fixed low income does have to pay rates, ultimately, and that is fundamentally what this bill is about addressing.

The equitability point is very important, and I say that as a member who represents an electorate in Auckland where my constituents are eligible for the Auckland Council scheme, so they’re doing OK. But that’s a pretty ad hoc way to be supporting older residents who potentially face these costs on very, very limited incomes. So I thought that point was extremely well made by the Property Council of New Zealand, and the House should certainly be considering it at this stage of the debate.

I next want to turn to Supplementary Order Paper 10. This is really important because the fundamental objection that was raised by the then Government, now Opposition, at select committee stage, and a concern that was flagged up by officials, was around the need for there to be a very clear definition of a ratepayer of a residential property. There was a letter that was sent to Andrew Bayly, being the chairperson of the Local Government and Environment Committee, which raised this point. That is exactly what Supplementary Order Paper 10 addresses.

Here we go. We have a new definition that addresses this. A residential property means “a rating unit under the Local Government (Rating) Act 2002 that is used as the usual place of residence of the ratepayer at the commencement of the rating year in respect of which an application for a rebate under this Act is made, but does not include any unit that is also used principally for commercial or industrial or business or farming purposes;”.

I just don’t think that we can get all that more specific than that. It ticks every single box in terms of the specificity of the property linking to the person making the rates rebate application. I’ve just got to say that I think some of the arguments that we’re drilling down into, in terms of trying to get more specificity around that, are really beginning to go down a rabbit hole. It’s very, very clear to me—and we hear that the officials support this—that SOP 10 addresses that one substantive issue that was raised at the select committee stage. I think that removes one of the singular causes of objection to this bill.

I just want to end with a question for the member in the chair, Ruth Dyson, who I know has worked tirelessly on this issue, and that is to ask her whether she thinks this will be the best member’s bill that will be passed in this term of Parliament. Thank you.

I am very pleased to speak on the Rates Rebate (Retirement Village Residents) Amendment Bill. Can I just acknowledge the member in the chair, Ruth Dyson, for a couple of reasons. Firstly, it is an important bill. We know we have an ageing population. As my colleague has already mentioned, we’re going to go from 700,000 to 1.5 million by 2046. So we need to be doing more for the ageing population.

The question is: what are those things that will make a difference to people’s lives? We haven’t previously supported this bill because we’ve sort of sided with what has been in the report from officials—that there have been real issues with the way that it was drafted. However, can I acknowledge, though, that the member has done some great work in terms of the Supplementary Order Papers (SOPs) and we are supportive of those SOPs.

I’ve got three questions that I want to raise and would like specific answers from the member. The first is just sort of a general one, in terms of costs. I wasn’t on the select committee, but I understand that the cost of the rates rebate scheme is about $56 million. This is supposed to account for about 10 percent of that. I’m not clear whether, as a result of the SOPs—I don’t believe there have been changes, but I just want clarity that there’s not a change in terms of that overall fiscal cost.

The other thing that I want to be clear on—I know previously, in other speeches in Hansard, colleagues have raised issues around the administrative costs of this bill. I think the SOPs will make it better, so my second question is: as a result of the SOPs, is this now going to be reduced in terms of costs? Have you got figures on that? I think you’ve been working with the Department of Internal Affairs. Do we have any greater clarity around that, because that is a real issue?

But the third issue I want to raise is that I’m really delighted that the Hon Phil Twyford is down in the Chamber, because he might be able to shed some light on this as well. I’ve been very passionate about the need for reform in unit titles legislation. A number of people across New Zealand fought very hard to work with the Government to get a working group up to have proposals of change that I think are relevant for this bill. But we’ve been unable, at the moment, to get a clear answer from the Government as to what’s happening with those proposals.

The reason that it matters is if there is a dispute around a unit title, for which there are—as I understand it, we’ve got about 14,000 bodies corporate. The number of units is I think, on average, under 10. But you’ve got hundreds of thousands of people affected by that unit title reform that needs to happen. The question for me, at an administrative level, is if there is a dispute around that, what does it mean in terms of rates rebates? I don’t know: was this considered as part of the official deliberation on the bill? But I would love to get some answers on that and ideally just find out whether the Government has plans to work on the unit titles legislative work, with this rates rebate bill. Thank you.

Madam Chairperson Tolley, thank you for the call on the Rates Rebate (Retirement Village Residents) Amendment Bill. Often, when you are on House duty, you listen to bills and then there’s an opportunity when you hear parts of the bill that actually have some connection to you. I just want to acknowledge the Hon Peeni Henare. When he talked about the changing demographic profile of those going into rest homes and into retirement villages, he talked particularly about those who are Māori, and we know that for Pasifika that’s also changing—and also for other diverse groups, as well.

Why that point becomes quite important to the member is that the intent of the bill, in its general policy statement, is “to allow ratepayers of residential properties who are on low incomes to receive a rebate on their rates.” So the idea of the member, in putting this bill, was to allow those who were ineligible to have the opportunity to be eligible to receive the rebate.

So in terms of the intent of that, I believe that none of us across the House would disagree with that. But therein lies some of the challenges that then will come. As the Hon Peeni Henare talked about them—he talked about the power of attorney and the challenges that that causes. I just want to put it to the member that in the submissions that were held—and I can’t say; I was not part of the select committee and privy to being able to hear some of the submissions. But one of the challenges, in order to be able to see the changing demographic of those who are on a low income—and I know that Michael Wood talked about the ability, when you see a $610 or $600 rebate that’s available; it’s enough incentive to go out and to apply.

But to a number of those who are often on low incomes, who are working families, sometimes even though the incentive may be there, there may be a barrier to that. I wondered if the member may have heard from those in local councils who are administering this—they may have heard, for instance, that some of those low-income families may be of a different diversity, a different ethnicity. We’ve seen, time and time again, that things like, for instance, interpretation and translation become really difficult.

So while the intent of the bill is to provide that eligibility for those in that demographic profile and those on low incomes, has there been some thought to make sure that those whom we’re trying to serve, with the intent of this bill, will be met in that way? Were there any thoughts from the administrator, as in our territorial authorities—had they taken that into account? We’ve seen on a number of occasions where many of those in which there is intent to try and increase the accessibility—let’s take, for instance, in the local elections or the general elections—there’s been the move by those bodies to be able to ensure, in respect of these translations going into those communities, that we disseminate enough information, and actually we make it a bit easier for them to be able to apply for that as well.

The second point that I’d like to make in my contribution is just in regard to—the maximum rebate is currently $610 and the income abatement threshold is $24,470. I know that the Hon Tracey Martin was talking about the increase in that rebate and potentially what that could be for other eligible residents as well.

I suppose the intent—and, again, a question for the member: in the submissions, when there was the conversation with the territorial authorities in their administration roles, obviously the view is that this will now increase the number of eligible residents that are there to apply for them. What were the costings in regard to their own costs? As you know, when you are increasing volume, there’s the ability to create some extra savings.

So I think, in both ways, I’m just wanting to sort of get a sense that, again, we want to ensure that there’s accessibility for those whom we’re wanting to target with the intent of the bill. Secondly, if we want to ensure that potentially there could be an increase in the rebate threshold, were there other areas of savings that could have been had by those that are there as well?

I just want to, again, commend the member. Like the Hon Peeni Henare, I have seen in the Pasifika community, in particular, an increase in those who are now going into rest homes. I know there was time when there were cultural constructs where we wouldn’t normally see that. But we have to accept that that has become the reality in the changing dynamics of our families. Again, I suppose, and I put this to the member: if our intent is to serve those members who at times may find it really difficult in terms of translation and interpretation accessibility, have we ensured that those are put in place, and that it’s taken into account by those territorial authorities that they will put those mechanisms in place to serve those in need? Again, I just want to thank the member for her contribution.

I call Simon O’Connor.

Excellent! Persistence is a great virtue. Can I acknowledge the member in the chair, Ruth Dyson, for taking this bill through the House and I think taking quite a number of questions. I apologise in advance that I’ve got quite a few myself, and in many ways they start with the basics. That is not a reflection on the member or the bill in any way, but I’ve found—granted, not as a lawyer, but as a member of Parliament—that it’s easy to get taken with some of the bigger elements, but some of the more, I don’t know, basic, simple ones need to be addressed first. So it’s probably no surprise to the member or the committee that, like colleagues on this side of the Chamber, at this point I’m still not supporting the whole bill but am in support of the Supplementary Order Paper, and, in particular, I am referring to Supplementary Order Paper 10.

I think the Supplementary Order Paper overall, as an acknowledgment, is a great step forward, and I think the member in the chair has acknowledged the work that’s been done to bring it here. But I’m looking particularly around clause 4 here in Supplementary Order Paper 10. It begins with the definition of residential property. It’s a very basic question, but when I chaired select committees I found that often we are taking a Supplementary Order Paper or a piece of legislation and referring back to something in a previous time, and in this case we’re looking at an Act from 2002, which is about 15 years ago. So it’s a very simple question, as I indicated at the start—basics, really—but is the member confident that we are getting the right definition by referring backwards again? As an example, I know that in the Health Committee several times we referred back to an older piece of legislation to try to define a current piece of legislation and found that wanting. That’s one of the reasons we passed the health practitioners Act last year. So a simple question there: is she convinced that the definition of residential property, as defined in the 2002 Act, is sufficient?

Then, for me, it gets a little bit more technical because, in clause 4you’ll excuse me having to put my glasses on these days—you’re talking about “a rating unit”—or the member rather—“under the Local Government (Rating) Act 2002 that is used as the usual place of residence of the ratepayer”—and this is the important part—“at the commencement of the rating year”. So we’re talking about a very specific time. To try and illustrate what I’m getting at, and the clarity from the member would be welcome, if a person is in a retirement village on the day of the commencement of the rating year, whatever that day is, but then leaves the next day, do they qualify—do they still qualify? I’d be interested to know that.

The next element is: is there a need, perhaps, for an abatement regime? Again, to illustrate the point, it says here very clearly in Supplementary Order Paper 10 that: “the usual place of residence … at the commencement of the rating year”. So, again, a particular date. If they’re there a week or a month afterwards, do they still get to seek the rebate? Is that the entire rebate? Is it no rebate? Is it an abatement? Excuse me if we’re getting lots of “bates” into here, but how does that work out? I know it’s simple at one level but I think it needs to be quite clear.

Further on that, in clause 4(1)(a), it understandably talks about how the unit is principally not being used for commercial, industrial, business, or farming purposes. That makes perfect sense, but I’m turning my mind to my own electorate. We have a number of retirement villages. In fact, we have some aged-care facilities, and there are some questions around that distinction, too, but I can think of some of the residents in those retirement villages who do—well, not do; they continue to operate businesses, more in the professional services. So I’m thinking of the likes of accountants and lawyers. I’d be interested to know where the threshold kicks in around “principally”. I can understand if Bob is doing an hour of accounting work a week, but where do we tip the balance here? I wouldn’t mind some clarity from the member in the chair around that as well. Again, they’re basic, but I find—and I don’t know how the member herself finds it—but constituents tend to pick up on these simple and small things, and it’s often these that can trip me up.

The next is around, again, clause 4(1)(b). Very similar again around commencement dates. So, again, the member’s Supplementary Order Paper 10 talks about the retirement village—“a rating unit … that is used as a retirement village at the commencement of the rating year”. So my first set of questions was around whether the individual must be resident at the time of the rating year. We’re then now talking about the facility itself, and there are some multiple facets to this that I think are relatively important. The retirement village, according to this Supplementary Order Paper 10—[Time expired]

It is a privilege to speak today on the Rates Rebate (Retirement Village Residents) Amendment Bill. It’s an issue that I’ve had some experience with. Like the member opposite, Michael Wood, I’ve also had the privilege of sitting on one of the local boards in Auckland Council and holding clinics helping retirees to be able to fill out their forms to apply for their rates rebate. I guess I echo what my colleague Brett Hudson was raising earlier, which was the whole application process and where that currently sits. Under this proposed bill, there’s a Supplementary Order Paper (SOP) that very helpfully puts in place an application process, which, I must say, is very similar to what is already in place, which is good.

But I guess the question is: how can we make it easier for those who are entitled to these rates rebates to actually be able to receive them without having to go through what is quite a complicated process? Now, I know many, many people know how they can apply for them, and they use the opportunity every single year, but how can we, as a Parliament, do something to make that easier?

I’d like to note that this piece of legislation is over 40 years old, and I think the wider point around it is that this piece of legislation should be reviewed as a whole. I’ll acknowledge the member for wanting to do something in this space, because it’s an important space. There are more and more retirement villages being built. There’s a new retirement village being built in my electorate, quite close to Pakuranga Park Village, a retirement village. And with an ageing population, these issues are issues that are going to come up more and more. So I guess the question is whether we should, as a Parliament, be looking at taking a broader, wider look at this legislation. I noted somewhere that that was one of the recommendations that came back through the select committee process, and whether that’s what should be happening with this particular bill.

Another question I’ve got—and it relates to the increasing costs that we’re seeing with local government. In Auckland, Aucklanders will be pleased to see that the council’s proposing not to charge the interim transport levy, which is going to be replaced by a petrol tax, but it relates to the costs of local government. I guess the question relating to this bill is the question of what the cost of this will be and the increased burden on local government as they go through their budgetary processes in the lead-up to next year. So this bill, yes, it comes into place at the same time that their new budgets will have to come into place in the middle of next year, but that’s something that they’re going to have to consider.

I was looking at the application process in SOP 10, under the proposed section 7A(4)(c)(iii) “that the resident’s rates contribution was made under a written agreement between the operator and the resident;”. I guess that raises the question in my mind around the fact that a lot of different retirement villages operate differently in relation to how much of the cost of the rates they apply to those who live in those villages. The question there is around these agreements. Some retirement villages will pass on the full cost; others will pass on a small amount of cost. How will that be included into the process for how much these retirement villages’ residents will get from the rebate?

So there are a number of questions that we have on this side regarding this bill. As I said earlier, I think it has good intentions. It’s one of those issues that are going to continue to grow as we have a growing elderly population, as more retirement villages are built. I would hope that at some point in the near future we would be able to look at the Rates Rebate Act and do a complete review so that we can resolve these issues in a proper fashion. Thank you very much for your time.

The questions that were asked in the last four contributions were incredibly similar to the questions that were asked earlier in the debate, but there were one or two that have not been addressed, so I’ll try to address them.

The first thing, though, is that I just would remind members that what we are talking about now is people who live in retirement villages, not people who are in rest homes, and that cuts out quite a lot of the debate, because this isn’t about rest homes. This is about people who buy a villa or an apartment in a retirement village and, instead of getting a unit title, they have an occupational rights agreement, more often known as “licence to occupy”. That cuts out any of those questions about the rest homes and the contribution that Government makes.

We have been over the administrative cost. The unit title reform legislation that the Hon Nikki Kaye raised is not at all related to this. In fact, if it was related to this, we wouldn’t be having the debate, because this is about people who do not have a unit title. That’s the point of the debate: it’s filling the gap.

Finally, Mr O’Connor raised the question of definition, and the answer is no. If somebody moves out of the villa, whether it’s two days or two years after the start of the rating year, they are no longer eligible. You have to be resident in that property in order to be eligible to apply for a rates rebate.

I move, That the question be now put.

Thank you, Madam Chair Tolley. When I was the Minister for Seniors over the past three years, I had been very much aware of the issue around this particular bill, and I would like to draw attention to aspects of the Rates Rebate (Retirement Village Residents) Amendment Bill.

When this bill first came before the House there were problems with it, and I think that the Supplementary Order Papers that the member Ms Dyson has put forward go, in some way, to making this bill more clear, more simple, and more straightforward. However, there are some questions remaining, and I would be very interested to hear how the member proposing this legislation would deal with those.

One of the things that has become very apparent is that the old regulations around people going into retirement villages meant that some of them, depending on their age and so forth, could be signing up for life. The capped service fee for life has been an issue for many of the retirement village owners that I have heard from, who have expressed concern at the idea of doing rebates on, effectively, what are fixed costs, which may well have been paid off by the residents after a period of a decade or two. Thankfully, people are living much longer and healthier lives. This is, of course, a good thing. It means, of course, though, that we have an ageing population. When people are in a retirement village environment, they tend to stay there. The villages are now expanding.

I feel that the capped service fee and the cost to the owners of these facilities is therefore going to be a growing problem, and I wonder if the member has given thought to how there might be some amendment or capacity for some of these villages, who, in all good spirit and faith, have signed people on to these capped service fees, and then find themselves unable to run their own facilities in the way that they want to, because they simply don’t have the money to do the work that they do if the residents aren’t paying it.

When we look at what has happened in the way that rates rebates are calculated—as the member pointed out earlier, there are of course a number of places around New Zealand that do things differently. I am, in addition to being the spokesperson for conservation in the Opposition, also the member of Parliament for North Shore, and I’m very well aware that the Auckland Council’s rates remission policy does enable the Auckland Council to remit the uniform annual general charge and, as well as that, the transport levy, which is a targeted rate for residents of retirement villages, although we are hearing more from Mayor Goff that that may go when the fuel tax, which will come in at some stage next year, comes in. So there is a level of uncertainly as to what exactly people will be paid back.

A remission that is applied to the rates of the retirement village where the applicant resides, where an agreement exists between that retirement village operator and the council—those benefits are passed on to the resident, but not in all cases. It seems to me that when we look at what occurred to the residents of Auckland in the last few weeks, which is where we went online and found out our re-evaluations, and, for many people in the electorate that I represent, people’s values for their land—not so much the improvements, but for their land—have gone up by up to 75 percent. Happy on the one hand, of course, that the properties have gone up in value; feeling a little bit sick and worried as to what may happen in June next year when the ratings come up.

The reason I’m giving this as an example is because, if the rates go through the roof—which people are fearful of—then the rates rebate rate is going to be negligible and is not going to make any difference to people on fixed incomes who are capital rich—their properties can be sold for a great deal of money—but don’t have the sort of disposable income that would allow them to meet the extra cost. In a retirement village situation, for example, if they’re not on a fixed-rate contract—and there are some variable contracts around New Zealand—they may then find that they are in a position where they are being charged too much.

So, with the land values shooting up in many parts of Auckland, I wonder how that is going to be accommodated—and those burdens, when it comes to people who are paying, goodness knows, $7,000 to $10,000 annually. If you extrapolate that out, in the area that I represent—Ryman Healthcare, for example, have just put in, or are about to commence building, a very large retirement village, and they will be doing a lot to ensure that they recover their costs. So will it then become prohibitive for people to move into these retirement villages? I feel that there are a lot of issues of this kind.

I move, That the question be now put.

I raise a point of order, Madam Chairperson. Earlier, when the previous Chair was in the seat, I asked for the bill to be considered in four parts because there is so much information and material, as a result of a mishearing.

The CHAIRPERSON (Hon Anne Tolley): So what is the point of order?

So the point of order is that this is a substantial bill and we would like to continue to debate it.

I’m sorry, but the motion has been put and the Ayes have won. Although the debate for the bill was taken as one, we will be voting clause by clause.