Goldsmith Paul: Kaipara District Council (Validation of Rates and Other Matters) Bill — Second ReadingText is incorporated into the Bound VolumeGoldsmith Paul: Kaipara District Council (Validation of Rates and Other Matters) Bill — Second Reading[Sitting date: 13 November 2013. Volume:694;Page:14667. Text is incorporated into the Bound Volume.]PAUL GOLDSMITH (National): We had a number of quite rowdy speeches before the dinner break on this bill the Kaipara District Council (Validation of Rates and Other Matters) Bill. I am referring to a very senior politician the leader of New Zealand First. I do want to get back to the serious nature of this debate. There is no question that the Local Government and Environment Committee which I sit on has had a very lengthy consideration of this bill. It has been on the committee’s agenda for a long time and the committee members wrestled very hard with this legislation because nobody was very enthusiastic about retrospective legislation.We were presented with no real good options. Every option was painful to some degree. We heard with great concern the stories and real concerns of the ratepayers particularly in Mangawhai who felt that very inappropriate things had happened on the Kaipara District Council and that spending had ballooned out of control. They were concerned that this legislation might in some way validate acts that were illegal or inappropriate. So there was a long painful process of teasing out what indeed the reality was that we faced and the narrow nature of this bill.I do want to make special mention of my colleague Mike Sabin the MP for Northland who shepherded this bill through the House in a manner that was forthright and straight up and down as we would expect from a straight shooter from Northland. There has been no doubt that he has indefatigably defended the interests of all the ratepayers and people in the Kaipara area and tried to navigate his way through what has been a very difficult issue.The first option that we had was to weed out and differentiate acts of omission on the part of the council which were legal acts of rating that were done where the i’s and the t’s had not been dotted and crossed properly and the legislation had not been dealt with and separate those from anything that was more broadly an issue of concern. Then we were faced with the other option which was to do nothing—not pass the bill—and then perpetuate a problem where a wider set of ratepayers in the region were left carrying the can while a smaller group went on strike largely on a point of principle.It seemed to us that when we drilled down into the issue the longer we delayed this legislation the more costs were being piled on to the local council and effectively on to the wider set of ratepayers and that was becoming intolerable. So after much agonising we agreed nearly unanimously—although it appears that New Zealand First has drifted off in another direction—that this bill made sense.So if we could just go through some of the details the bill authorises both the rates and the penalties added to rates to be recovered as is normal for local government validation legislation. We have before the House at the moment not just this piece of legislation but also a bill for the Tasman area. Nobody is enthusiastic about this legislation. It does raise the broader issue of just how effective councils are being in navigating their way through what are very complicated requirements in legislation.If anything comes out of this whole episode I think it is that we do need to think carefully about how we put many sets of hurdles in front of relatively small localcouncils and then expect them to do everything perfectly. There are two sides of the equation. One is that you expect councillors and councils to do an effective job at raising rates which is one of the most important functions that they have but also we do not want to have legislation that is overly complex and makes it difficult to achieve perfection.The select committee when we heard all the submissions from various parties both in Mangawhai and in Auckland recommended amending clause 6 to ensure that penalties can be charged only if they would have been added to rates validated under this bill. There was widespread concern that some of the penalties were on the heavy side for people who had been caught up in this. There was a long argument about that but I think the collective wisdom—again guided by the practical pragmatic no-nonsense approach of Mike Sabin—brought us to a situation that I think has the best chance of getting a sustainable outcome for this community and the wider region.If I move on some committee members felt that some more of the penalties should have been remitted and again we thought about that carefully. The commissioners—appointed at the request of the council in 2012—have agreed to take a proposal to the council in which certain penalties would be forgiven if the bill is enacted in this calendar year. The importance of enacting this bill in this calendar year is that as we were told by the commissioners with each passing month and each passing 2 or 3 months more and more cost is being put at the feet of ratepayers particularly if it means that they are unable to successfully claim some of the regional roading subsidies that are available. So penalties applied in the 2013 calendar year as well as penalties due to be applied on 1 January 2014 will be remitted under this proposal.When I drill down further into the specifics the bill validates the following. It validates specified rates set either inconsistently with the council’s funding impact statement and/or not allowed for under the Local Government (Rating) Act. Clause 3(b) states it will “treat all money received by the Council in payment of the specified rates or penalties added to those rates as having been lawfully paid …”. Clause 3(c) states it will “authorise the Council to recover any part of the specified rates and any penalties added to those rates that remain unpaid …”. Clause 3(e) also states it will “validate the information contained in the rates assessments for the financial years relating to 2006/2007 to 2012/2013 (inclusive);”.When we look at the long-term plan and annual report this bill will also “validate other actions or omissions of the Council relating to—the continuation of its 2006 development contributions [levy] … the late adoption of its annual report for the 2011/12 financial year and its long-term plan for 2012-2022; and (iii) its conduct of the special consultative procedure for its long-term plan for 2012-2022;”. None of these things were handled particularly well by the council but again the committee was left with that series of difficult choices and we plumped for correcting those inadequacies.Finally for the absence of doubt in terms of accountability clause 14 was amended to make it clear that any person not only the Kaipara District Council has the right to bring proceedings. A number of submitters were concerned that if we passed this legislation they would be left with no ability to hold people to account for wider acts of omission—particularly the quality of the spending on the waste-water plant—or the lack of quality of that spending. We were very concerned to hear from the Auditor-General as a result of her work but also of the wider investigation of the quality of that decision making so that we did not by this legislation make it impossible for people to hold those people to account for those actions.There is no question that the Kaipara District Council has had a difficult few years. As well as the rating irregularities the council presided over what has proved to be a very controversial Mangawhai sewerage scheme and a considerable increase in debt.This bill does not stop as I said the proper scrutiny of those decisions. Nor does it absolve anyone of responsibility or culpability. If we go back we note that the commissioners were appointed by the Minister of Local Government at the request of the council in September 2012. This bill does not impinge in any way on several inquiries under way particularly the inquiry by the Office of the Auditor-General into the Mangawhai sewerage scheme.So all in all this bill has been a difficult one for the select committee. We wrestled with it. We do congratulate the MP for Northland Mike Sabin who was left to carry this burden and did it with good grace. I commend this bill to the House.