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Proposals To Bring Rates Rebellion To A Conclusion

15 November 2004

Full Text Of Address To Be Given To Auckland Regional Council At 6pm Today With Proposals To Bring Rates Rebellion To A Conclusion

"Rates Rebellion" Deputation To Auckland Regional Council At Its Meeting 15th November 2004. Address By David Thornton To The Council On Behalf Of The Deputation

According to one former ARC councillor the Rates Rebellion never happened. It was that sort of statement that cost that former councillor his seat. Others are now saying that the Rates Rebellion has run its course. That is closer to the truth - but is still not correct.

There are still thousand of ratepayers who are continuing to withhold all or part of their rates - especially penalties. Some of these ratepayers are patiently waiting for the ARC to take them to court. So the Rates Rebellion has not quite run its course. We are here tonight to put to you a six-point proposal which will, we believe, bring the rebellion to an orderly and acceptable conclusion.

1 Remission of penalties and payment of outstanding rates. Tens of thousands of ratepayers withheld payment of rates as a protest against unfair rate rises, and the previous council ultimately acknowledged it had made a mistake in the way it set those extraordinary rate hikes last year.

Thousands more ratepayers paid by 10% instalments, by monthly cheques, and were subsequently charged penalties which they refused to pay, because they believed - and the council acknowledged - that the rates demand was ambiguous in setting out the methods by which rates could be paid.

We have evidence that some of these penalties were waived, while others, in similar circumstances, were not. The previous council agreed not to 'chase' outstanding amounts owed under $5. The policy now seems to be not to take action AT THIS STAGE against anyone owing less than $25. The council has refused to give us the number of people who owe less than $25. These amounts are almost certainly all penalty charges.

This leaves an untidy mess which will be compounded as long these amounts remain unpaid - further penalties will take the amounts unpaid above the $25 trigger point. A further complication is that all payments are set against outstanding rates - so theoretically, and possibly actually, the unpaid penalty is collected by taking it when rates are paid in the new financial year, and the rates for that new year will show a deficit of the amount used to pay off the previous year's penalty.

The penalty structure will, to say the least, become extremely complex. There are probably thousands of ratepayers in this category. We have also been advised that about 6,000 ratepayers owe more than $100 and action will shortly be taken against them. Some of these people may well hold out until they are dragged to court by the council.

They are still smouldering with anger at the events of last year. To tidy up this potential nightmare we now ask this council to finally acknowledge the sins of its predecessor and;- i. Remit any outstanding penalties for 2003/4 year ii. Allow 12 months to pay off any outstanding unpaid rates

2 Undertaking to consider increasing business differential to 1.75 or 2. Despite the about turn in setting this years rate, by the introduction of a business differential, all residential ratepayers are still paying considerably more than they did under the former arrangement when local councils levied the regional rate on behalf of the ARC. Last year some ARC members proposed a business differential of 2 but were out-voted. We ask that this issue be put out for public consultation by way of including a proposal in the next Draft Annual Plan to increase the business differential to 1.75 or 2. There is a clear demand from ratepayers to move closer to 2002/3 levels of residential ratepayer contribution.

3 Undertaking to review transport rates with more 'bands' reflecting actual services provided There is a wide variety of service levels of public transport across the region and the present rates do not reflect this wide range. When this new transport rate was introduced this year there was acknowledgement that it was still not closely allied to actual services provided. We believe that several more bands of charges could be introduced which would be more closely related to services actually provided. Your officers have agreed with us that this can be done. It is therefore the responsibility of the political wing to make it happen. We ask that you make these changes for the next financial year.

4 Rates Collection process - revert to rates collection via local council. We have noted the substantial cost of collecting rates via EDS - the company hired by the ARC to collect its rates. Ratepayers generally prefer to receive only one rates bill and pay by way of four or six instalments through the year. We there ask the council to carry out an urgent review, with local councils, to establish if regional rates collection by local councils can be done at less cost and be more convenient to ratepayers.

5 Undertaking to call for all Auckland councils to work together to find alternatives to rates We have all heard, or even made, calls for an alternative to rates as the principal source of funding for local and regional councils. The ARC, with its expanded powers and responsibilities, will inevitably find itself requiring more money to carry out its functions. Under your present LTCCP the ARC is proposing a 13.5% increase next year.

If the rates rebellion taught this region's politicians anything, it was that ratepayers have had enough of continued unreasonable rate increases - and the unfairness of the system of property value on which those rates are levied.

For the last several months officials from the Department of Internal Affairs, and Local Government New Zealand, have been working together on, supposedly, finding an alternative to rates. We understand that an interim report is due next month. But we have also discovered that this joint working party has only been gathering statistical information.

This job of finding an alternative to rates needs to be tackled urgently - and with strong political and ratepayer input. We therefore call upon the ARC to take the lead in working with all councils in the region to establish a three year programme of delivering a new and fairer funding system for local government in this region. The Auckland region encompasses more than one third of the nation's ratepayers and should be able to initiate and resource such a programme.

6 Undertaking to push for zero-rating of GST on rates. Charges to citizens under any new system of funding should be based on services actually provided and ability to pay - and should not be subject to GST. As an interim measure, while the three year reform programme is being conducted, the ARC and local councils should lobby central government for GST on rates to be zero-rated This would give confidence to ratepayers that alternatives to the rating system really are being sought. And of course without GST the amount of rates each residential ratepayer would pay would fall significantly.

We put these six proposals to you with the earnest hope that by adopting them you can restore some level of credibility and trust in the eyes of the tens of thousands of ratepayers who were the foot soldiers of the rates rebellion.


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