Sage Eugenie: Christchurch City Council (Rates Validation) Bill — Second ReadingText is incorporated into the Bound VolumeSage Eugenie: Christchurch City Council (Rates Validation) Bill — Second Reading[Sitting date: 01 April 2015. Volume:704;Page:2848. Text is incorporated into the Bound Volume.]EUGENIE SAGE (Green): Like others in this House I rise reluctantly to speak on the Christchurch City Council (Rates Validation) Bill. The average daily cost of running this Parliament is over half a million dollars and the average bill costs $1.43 million according to the Parliamentary Library. So this local bill promoted by the Christchurch City Council is a very expensive way of fixing errors that the city council could have avoided.As others have noted the council breached the Local Government (Rating) Act 2002. It made mistakes in the way it worded its rates resolutions in relation to the payment dates for rates the authority to impose penalties on unpaid rates and the targeted rates for Church Bay and Governors Bay. The council was certainly trying to simplify the resolutions but these mistakes continued for 10 years. Although the bill attracted only one submission even though it is retrospective legislation it is probably uncontroversial because ratepayers do not engage with the minutiae of rates resolutions and because the actual rating demands that the council sent out were correctly worded.So the council has made mistakes and I share with other members the concerns about the offhand way in which its officers presented to the select committee but the city council in its long-term plan for 2015-25 is proposing to make an even bigger mistake than the ones that this bill aims to correct. In that long-term plan the council is proposing to sell off or sell down shares in strategic assets like Orion New Zealand the Lyttelton Port Co. Christchurch International Airport City Care EcoCare and Red Bus. The dividends from these council-owned companies through Christchurch City Holdingshave provided a key source of revenue to Christchurch. They have helped fund the council’s services and its activities and they have helped to offset rates.Rates in Christchurch have been lower than in Selwyn and Waimakariri which are neighbouring councils. They have been lower than in other city centres like Hamilton Wellington and Tauranga. The cash dividend that the city council will get from these companies in the forthcoming financial year is estimated to be around $46 million. That has the effect of lowering council rates by 13 percent. Those cash dividends have averaged 3 percent in the last 3 years and 4 percent in the last 10 years and there has been a 26 percent return to shareholders since 1996 because of asset growth and appreciation in capital value. That has been a very good return to the people of Christchurch. If the council proceeds to sell off those assets the dividends stream will halve.So it is a very short-sighted decision which the council is being panicked into making because of the National Government’s reluctance to renegotiate the cost-sharing agreement with the council. It is reluctant to take costly projects like the stadium out of the cost-sharing agreement—off the council’s books—and it is reluctant to re-engage and contribute a fairer share to the costs of repairing the council’s horizontal infrastructure.The council has come to Parliament to ask us to fix these problems with its rates resolutions—to effectively validate the payment dates for the rates and the issues around penalties. It has come to Parliament to ensure that all the money that it has received from the rates that it has levied is lawful so that it can lawfully go after people who have not paid rates and not face a legal challenge there but it will not be able to come back to Parliament and ask the House to solve the problems that the sell-off of these strategic assets like Orion like the port company and like the airport company will cause. They are problems where ratepayers in the future will be complaining about the rise in their rates because the revenue base for the council has narrowed. It will have to rely much more on rates rather than dividend income and we will not be able to fix those problems.The council should be looking at alternatives to asset sales to meet the financial shortfall. It should take a much more rigorous look at its own spending and it should scale back some of the roading projects. It should renegotiate the cost-sharing agreement. We need a much wider revenue base not a narrower one. I could go on and talk at some length about the problems with mixed-ownership models but I do not think Mr Deputy Speaker you would be comfortable with that.So coming back to the bill I was puzzled that the Society of Local Government Managers the Department of Internal Affairs and Local Government New Zealand have not done more to improve council practice around rates resolutions because as Todd Muller mentioned this is the third piece of legislation we have had to deal with in recent years where we have had to validate council rates-setting procedures. Belatedly work has been done to improve practice. There have been seminars conducted. The Society of Local Government Managers is updating and expanding its guide on rates setting. There has been a guide for elective members which is being set out and developed. But this problem is nothing compared with the problems that will arise if the city council is bullied by Government into selling Christchurch assets. We will be supporting this bill but we do so reluctantly. Thank you.