McKelvie IanIAN McKELVIE (National—Rangitīkei): Madam Chair thank you. I want to take a call on Part 2 of the Local Government (Community Well-being) Amendment Bill and talk about development contributions which for those of us involved in local government in the early 2000s was the bane of our lives. There's a very good reason for that because interestingly in the early 2000s—and some of the members of this House won't remember that far back—development and growth in New Zealand was very slow. Housing growth was slow section sales were slow and developments were very difficult to move on. That continued right through until probably 2009-10 or even later.But the reason I raise that is because the issue with development contributions was that to calculate how you might operate a development contributions regime you needed to have a timespan that they operated under because they worked in a manner that—say you had a block of a hundred sections. You'd put a development contribution on that which then contributed to parks and reserves libraries roads whatever you wanted it to contribute to—well probably not roads so much because that's an issue that's specifically mentioned in this amendment but certainly infrastructure underground infrastructure primarily. That contributed to it in a manner that I guess was designed to take the share that the new sections needed to provide to the growth of that community—so in other words a bit like being a shareholder in a company. You've already paid for your shares like Fonterra for example; you want new people that come along and contribute to buy shares in the company and that's how development contributions kind of worked.The problem was development at that time was very slow and because it was so slow the cost of those development contributions got larger and larger and larger based on the interest calculations that stretched out into the future. So by the time they'd been in place for some time they were putting a significant cost on those sections that were involved in the development contributions regime. So the National Government decided that that wasn't the way to go and they discontinued that. About that time of course development properties took off—the sales of properties took off. If that had happened initially with the development contributions regime it might not have looked as bad or as costly as it turned out to be. That was because of the long-term interest cost that was factored into the development contributions regime.So it was an interesting idea when it was first brought in by councils and there were many different methods or regimes brought to bear by councils as well in that; they weren't all the same. If the systems had all been the same and they'd all been calculated as one it might have been a better system but it wasn't and they were different in every council and city. You could end up in an area like my electorate where you've got six or seven councils where they all may have had—they didn't all have a development contributions levy actually because some of them had no development at all. In fact the population was diminishing in those days. So they all had a different regime. For people going into those areas to develop property for example it was very difficult to understand those regimes and they were all complicated. That was the reason it was discontinued by the National Government in 2008 or 2009.I mean you can sort of see some reasons for bringing this type of system into being and I'm in favour of this type of system. It's just a matter of how you manage it so that you don't get the costs running away on the ratepayers and that's the tricky thing. When you think about development contributions they were initially designed to take the load off the current ratepayers and load it on to effectively the new ratepayers which is not a bad system. If it worked it would be good but it's so difficult as I said earlier to calculate how those things work because the pace of sale of property has a big impact on the impact of the cost of those development contributions on that price of the property. So it was a complicated regime and one that I think some councils got into quite a significant amount of difficulty with. That was the reason for the disbanding of it.Now whether it's right or wrong to bring it back I'm not so sure. I mean we're obviously opposed to it for the reasons that we disbanded it but it could be that in different times this type of system works quite well. I believe it's a little unfair to expect the current ratepayers of an area or a district to pay for the new ratepayers coming in. They need to pay their contribution to that thing and that's what this was designed to do. Whether the system that's now being implemented in Part 2 of this bill is the right way to bring it about I'm not so sure and as a consequence of that—and I guess as a consequence of history—we are opposed to Part 2 of this bill and the amendments that reintroduce those development contributions. But it is a complicated system and it takes a fair bit of understanding. So that's my contribution to Part 2. Thank you Madam Chair.