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Bleak Future for Council Ratepayers

Chairman; David Thornton
email; david@kandu.co.nz

27 September 2005


These notes are intended for concerned ratepayers and the media and follow the news of the jailing of two pensioners in England for withholding part pf their council tax – the UK equivalent of NZ council rates.

Ratepayers’ comments are invited by email and I will be happy to respond to media inquiries.

David Thornton.


A woman pensioner has been jailed in the UK for failing to pay part of her council tax.

Another pensioner – a 71-year-old retired vicar, is already in jail for withholding part of his council tax.

Recently the Auckland Regional Council has been sending out letters demanding payment of outstanding regional rates within 14 days.

These letters have prompted several phone calls to me from Auckland ratepayers who are still withholding some of their ARC rates –some dating back to the year of the ‘ratepayers rebellion’ 2003/4.

Some people are still not willing to pay and I have pointed out to them that non-payment could eventually see them ending up in jail.

I have just received an unpublished Treasury report which was initiated by Cabinet direction as a result of the rates revolt of 2 years ago.

I had hoped that this report, obtained under the Official Information Act, would show that the government was seriously looking at alternative to rates as funding methods for local bodies.

I was disappointed – that task has been assigned to a joint committee of local and central government bureaucrats who are due to report in December.

The Treasury report drew the conclusion that council rates were ‘affordable’ at present and would continue to be affordable in the foreseeable future!

People on low and fixed income will find such comments hd to believe.
Incredibly the Treasury conclusion on ‘affordability’in based on the ‘growth in GDP’!!!!

My incredulity drove me to seek a definition of GDP –and this is the most accurate I found in an economic dictionary;-

Definition: The Gross Domestic Product (GDP) represents the total value of the goods and services produced by an economy over some unit of time (a month, a season, a year etc.). The "Domestic" part of the name comes from the fact, unlike GNP, it does not consider imports or exports in the calculation.

To the average ratepayer a suggestion that his rates are affordable relative to the GDP is totally laughable.

It became obvious to me that Treasury had taken a purely global economic view which had no relevance at all to an individual’s ability to pay rates.

In fairness Treasury did point out that ‘some subgroups may face genuine hardship in meeting their rates obligations’.

On the question of affordability Treasury passed that buck to central and local government officials to come up with solutions.

The first report from that group emerged in July – and is not hopeful.

It paints a picture of gloom for many councils as they face the problem of how to afford infrastructure development while keeping rates at an acceptable level.

All this means there is real urgency is finding alternatives to rates.

If not – how long will it be before New Zealanders will join the British cousins in the debtors’ jails?


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