Bayly AndrewANDREW BAYLY (National—Hunua): It is a pleasure to be talking on the Rates Rebate (Retirement Village Residents) Amendment Bill. First of all I would like to congratulate the member the Hon Ruth Dyson on actually introducing this member's bill. The purpose of the bill is laudable understandable and on the face of it fair. This bill was considered by the Local Government and Environment Committee and as noted before we have spent considerable time looking at its merits.By way of context it is worthwhile just noting that at the moment it is estimated that there are about 34000 retirement residents living in about 360 villages around New Zealand. I am in fact very conscious of the residents living in retirement villages in my own electorate particularly the four in Pukekohe although not exclusively there including the very exciting new development of Ryman Healthcare which has now got over 600 residents and is growing rapidly as it further expands.The purpose of the bill is to provide financial support to those low-income retirees living in retirement homes. Under section 6 of the Retirement Villages Act 2003 a retirement village is defined as a part of a property that contains two or more residential accommodation units predominantly used by or housing retired people who have also paid a capital sum to live in those villages. The rebate scheme was actually introduced back in 1973 to allow the residents living in these retirement villages to receive a rebate. Since then as the member has just noted previously there has been an absolute proliferation in what is called licence to occupy agreements. Previously when the Rates Rebate Act came in in 1973 there were very simple property ownership structures. Now it is estimated that approximately 80 percent of all people living in retirement villages actually live there under a licence to occupy agreement.In the case of licence to occupy agreements the liability to make the rate payment rests with the owner or operator of the retirement village. It is standard that the owner or the operator of the retirement village charges the retiree living in the village a fee that covers not only the rates but also insurance and property maintenance fees. As such most residents end up paying a rate of a sort but in most cases a direct payment is not made to the council. The amount of the rebate possible for a household is actually based on income levels the level of the rates and also the number of dependants. The current maximum rebate at the moment is $610 with an income threshold of $24470.Whilst as I said before the aims of this bill are to be applauded the work of the advisers showed that it is actually a very complicated bill to implement. I may be simple. However the first issue with the bill in its present state—and I would comment that the bill has only five clauses to it—is that it does not accommodate these varied property arrangements that I referred to before. By way of example at the moment we have freehold title we have leasehold title we have cross-lease we have licence to occupy we have lease arrangements we have residential tenancy arrangements—to name but a few. The bill does not anticipate these arrangements. It is very simplistic in its assumptions.The second thing related to that is that the bill proposes to amend the Rates Rebate Act of 1973 to ensure that the residents of retirement villages are considered to be ratepayers for the purposes of the Act. But in order to be to defined as a ratepayer apart from meeting those income thresholds that I specified before a person must be a ratepayer and secondly a ratepayer in relation to the property in question. The issue with the Local Government (Rating) Act of 2002 is that for the purposes of determining the ratepayer this is defined as the person who was nominated on the rating information database and on the district valuation roll. Here is the rub. To be named on the database the person must be the owner of the village—of the property in the village—and licence to occupy arrangements do not mean that the person owns the property. What this bill is seeking to do is to provide a connection between the resident and the ownership of the property which at the moment is broken because of the licence to occupy arrangement.The next thing that the bill raises is what the apportioned rates cost is. The second issue is that it is not always easy to ascertain this. For example it is estimated that about a third of all village operators agree with their new tenants or residents on a fixed fee at the outset of going into that village and at that point it is a set fee for the rest of the term of the licence to occupy that has no relation to the actual increase in rates that may occur over time. It is also common that village operators link the payment which may include property maintenance and insurance as I referred to to the increase in superannuation. There is no direct link to the actual increase in the rate or in fact a direct link to the rate itself. As such how you calculate what is appropriate is a real substantial issue.The other thing about this is that the bill does not comprehend that there actually may be a different range of rates. For example there could be a rate on the land that the normal council rate would apply to. There could be a charge for water and waste water and in the case of Auckland as was referred to before Watercare Services has a separate rate that actually for the purposes of rating can possibly not be regarded as a levy in fact. And there may be in fact a third rate which is a regional council rate. Again this bill offers no clarity on how those three rates would be interpreted or calculated or assessed. It is very simplistic in its nature.The next issue with the bill is the administrative costs to the village owner and operator. We know that it is going to be complicated because it requires an assessment for each of the residents. However if a village operator wants to do it it gives rise to an issue of privacy because to be entitled to receive a rebate by definition you need to be on a low income and what this does is it will require the resident to disclose to the owner of that property that village their straitened financial circumstances. For some that may be a barrier too far. That privacy issue is a significant issue which again has not been contemplated in the bill.The other issue with the bill is that at the moment we give about $56 million in rebates annually which is paid by the Government. The increased costs associated with this bill are estimated to be between $3 million and $5 million. It is actually a very very small number. The issue is not about money as asserted previously by the previous member. It is not about the money; it is actually about how you implement this system this scheme to make sure that it is appropriate and can be implemented.We asked for more time to work through these issues. The officials actually identified some other options that may work and that may be able to take into account these complexities that have been raised by officials and noted by members at the Local Government and Environment Committee. We sought one extension which was granted but unfortunately the second extension was not granted. I was very disappointed that the member did not choose to support that extension because if she had we probably would have had the time to work through and actually come up with a bill that actually works. But this bill in its present state is simplistic it is poorly formulated and on that basis we cannot support it even though we strongly support the intent of the bill.