Muller Todd: Christchurch City Council (Rates Validation) Bill — Second ReadingText is incorporated into the Bound VolumeMuller Todd: Christchurch City Council (Rates Validation) Bill — Second Reading[Sitting date: 01 April 2015. Volume:704;Page:2846. Text is incorporated into the Bound Volume.]TODD MULLER (National—Bay of Plenty): It is “Muller” Mr Deputy Speaker if it is possible to just anglicise it. It would have been “Mueller” back in 1860 when our family arrived but it is now “Muller”.Hon Member: Surname validation.TODD MULLER: Yes thank you for that contribution. I am rising to speak similarly reluctantly really to the Christchurch City Council (Rates Validation) Bill. I acknowledge your ongoing interest in this topic Mr Deputy Speaker and also that of the many thousands of people in Christchurch who will be sitting on the edge of their seats waiting for this piece of legislation to finally get through here this evening. I do want to acknowledge the Hon Nicky Wagner.Stuart Nash: They’ll be asleep if they listen to this speech.TODD MULLER: I will amp it up shortly; we just want to start slow. So well done for your contribution Nicky Wagner. It is obviously something that needs to be done and I thought you articulated the rationale for that very well. I also acknowledge again Scott Simpson for his leadership of the Local Government and Environment Committee and the way we have managed this issue through as a group.As I am sure we all know the bill that is in front of us this evening is the Christchurch City Council (Rates Validation) Bill. Its purpose is to correct an administrative anomaly. Unfortunately there is clear precedent for this. We have been here before. Maybe this is a South Island thing I do not know but we were here a year or so ago for the Tasman District Council (Validation and Recovery of Certain Rates) Bill. That obviously was passed to fix some retrospective administrative errors. I guess—if we are to be very generous in our outlook—we could say that local government is particularly complex. We have 67 territorial authorities 12 city councils 53 district councils; six territorial authorities—Auckland Council the Chatham Islands Council Nelson Gisborne Tasman and Marlborough—are unitary authorities and I guess with all of this complexity there is going to be the occasional error. I guess one argument—and we have heard it particularly from the other side so far this evening—is that you know this happens infrequently human errors can occur and when they do it is appropriate for us to get together and fix them which is what we are doing this evening.Essentially the assistance that we are collectively offering tonight is because the council failed in its rates resolution to state that the rates were payable by instalments what the payment dates were for those instalments and what penalties would be added for late payment in these and previous years. The administrative breach to be technical for a moment with respect to the bill is a breach to the Local Government (Rating) Act 2002 mostly around section 44 “Notice of rates assessment” and section 45 “Contents of rates assessment”. The relevant part here for those in the House who are particularly interested in this detail is section 44 “Notice of rates assessment—(1) A local authority must deliver a rates assessment to a ratepayer to give notice of the ratepayer’s liability for rates on a rating unit. (2) A ratepayer is liable for rates on a rating unit when the local authority delivers the rates assessment for that unit to the ratepayer.” So that is section 44—[Interruption]—for a moment there I thought I was going to get a point of order that might have stopped me.Hon Ruth Dyson: That would have required me to have been listening.TODD MULLER: You are following this and enjoying it no doubt. In section 45 “Contents of rates assessment” the particular part here that caught Christchurch city was “(m) the methods by which rates may be paid and the date or if the rates are payable by instalments the dates by which specified amounts must be paid: (n) if applicable—(i) the penalty regime of the local authority; and (ii) a warning that if rates are not paid on time a penalty may be added under that regime:”. So as you can see this is a complex process. The city council in many respects as we have heard this evening was trying to simplify that but in its enthusiasm to make the rates setting process more easy for its constituents to understand it missed a pretty critical part in that process.I did a rough count on the amount of ratepayers in New Zealand. There are roughly 2 million. If each ratepayer receives a quarterly rates assessment that is about 8 million rates transactions that occur. So I guess again to be charitable if you look at this particular error in the context of New Zealand as a whole it is not extraordinary that we have to be here tonight. I do have a lot of sympathy with the sentiment that our chairman Scott Simpson has articulated this evening on two points. Firstly we do expect that officers of councils are familiar with a ratings Act that came in in 2002 and would have the appropriate internal controls to ensure that they are following the correct process accordingly. Secondly when an error has been found and you are asking Parliament to make a change to validate you and to essentially get you off a hook you would expect some degree of contriteness and I think Scott the member for Coromandel summarised that very well. I was like him very disappointed that there was not a sense of acknowledgment that Christchurch City Council had to put the Parliament through a process when quite frankly our collective wisdom could be well focused on things other than this. I was disappointed that when we flew down to meet with the council there was a degree of offhandedness in respect of the way it was approaching this particular issue.What you would also expect in this debate—and I am sure we are going to hear it shortly with my good friend and colleague Mr Mark—is a reference to the role of auditors. I just thought I might get in first here because I have heard him speak very eloquently on this before—perhaps because of his passion for local government—saying that somehow if the governors and officers of a particular local council slip up then really it should be the auditors who pick it up and really it is the auditors who should be hung out to dry. Of course they are a key part of it but I do hope that the governors of a particular council and the officers of a particular council do not take the approach that actually they can do the best they can but it is really the job of an external auditor to pick up the things they miss. That is not what best practice is. It is nowhere near best practice. There should be a strong internal audit function. There should be a good mix of governors and officers participating in that internal audit process and they should have the capacity capability and focus to ensure that they pick up these errors and not have an approach that says that if they miss something an auditor should cover it for them.In that regard it was very positive to see that the Society of Local Government Managers has identified that there is room for improvement. We saw that in the report back from the department and the various work that is under way to improve councils’ practices with respect to setting rates resolutions. I was very pleased—and I am sure the various members of the select committee were very pleased—to see that work under way not before time. We have an expectation that the officers of councils are at the very best level of best practice and process. We really should not be in this position again of having to cover up for administrative anomalies. With that I would like to add my somewhat reluctant voice on this side of the House to this particular bill the Christchurch City Council (Rates Validation) Bill and will remain very interested in the ongoing debate as it occurs over the next hour. Thank you.