Heatley Phil: Kaipara District Council (Validation of Rates and Other Matters) Bill — Second ReadingText is incorporated into the Bound VolumeHeatley Phil: Kaipara District Council (Validation of Rates and Other Matters) Bill — Second Reading[Sitting date: 13 November 2013. Volume:694;Page:14653. Text is incorporated into the Bound Volume.]Hon PHIL HEATLEY (National—Whangarei): I too rise in support of the second reading of the Kaipara District Council (Validation of Rates and Other Matters) Bill. The bill is sponsored by Northland MP and my colleague and neighbour Mike Sabin. Members will be aware that his electorate is north of me west of me and south of me and my back is to the sea. I am a little like Israel when it comes to Mike Sabin. [Interruption] He is nothing like Palestine. He is an excellent Northland member of Parliament. In presenting this bill to the House he took very very seriously the matters occurring in Kaipara and the spending by the district council over recent years the concerns not only of ratepayers in Mangawhai but also of ratepayers right throughout that district many of whom—not just those from Mangawhai—worked hard on the resolution that you see in this legislation.I do know that Mike Sabin before agreeing to support this particular piece of work said that he would not support this bill if it sought to validate matters that could not have been done within the law in the first place or if it would impose further costs on those who had in good faith paid their rates over the years. He was concerned about that. He also said at that time and has repeated it that he would not have validated any matter that was born of any criminal actions. Mike Sabin was clear about that. I do know that my colleague also made it clear to the commissioners to ratepayers and to this House that this bill does not absolve those responsible for the failures that have led to the need for this bill. “I would not support it if it did.” Mike Sabin said. He has responsibly brought this bill to the House and it has gone to the Local Government and Environment Committee and we have got support from across the House from all members of Parliament—Rt Hon Winston Peters: No you haven’t.Hon PHIL HEATLEY: —who matter; from all members of Parliament who matter.The bill will support 124000 citizens in Kaipara. It will bring certainty and closure to a number of irregularities over the past 7 years. The district council acknowledges that a number of irregularities occurred in the way that it set the rates. Certainly the select committee members noted that and this bill is about fixing those very irregularities. The bill will mean that ratepayers will be liable for the rates that they were invoiced for and no one will pay more rates than they were historically invoiced for. So it is a good solution.The select committee did make some changes. The bill authorises that both rates and penalties added to the rates be recovered as is normal for local government validation legislation. The select committee recommends amending clause 6 to ensure that penalties can be charged only if they would have been added to the rates validated under the bill. Some committee members felt that some of the penalties should be remitted. The commissioners appointed at the request of the council in 2012 have agreed to take a proposal to council in which certain penalties will be forgiven when the bill is enacted this calendar year. It is very important to acknowledge the work of those commissioners in supporting the select committee keeping us informed and being flexible enough to change their views where they could see that a compromise imperfect as it was needed to be made. Penalties applied in the 2013 calendar year as well as penalties due to be applied on 1 January 2014 will be remitted now under that proposal. We thank the commissioners for that and ultimately of course thank the ratepayers in going with this.In the provisions in more detail it is worth noting that in terms of the rates the bill validates the following: it validates specified rates set either inconsistently with the council’s funding impact statement or not allowed for under the Local Government(Rating) Act it treats all money received by the council in payment of the specified rates or penalties added to those rates as having been lawfully paid and it authorises the council to recover any part of the unspecified rates and any penalties added to those rates that remain unpaid. In terms of the issue of the penalties we have worked hard with the chair of the commissioners to find a way to accommodate those concerns. I know that Mike Sabin is pleased as we all are to report that we secured the commissioners’ commitment to take to council a proposal to forgive specified penalties that had already been applied in rates notices when this bill is enacted in that year. Under the Local Government (Rating) Act 2002 a local authority is able to apply further penalties on prior years’ arrears that are outstanding on 1 July and 1 January each year. That is well not common practice but normal practice in many situations. It is these further penalties that are being applied in the 2013 calendar year that the commissioners will seek to forgive.In addition to this there is a further penalty due to be applied on 1 January 2014 on balances outstanding against rates accounts. Should the bill be enacted into law this calendar year the commissioners intend to change council policy to enable the remittance of this penalty on the condition that rates accounts are brought up to date by 30 June 2014. I believe that rates strikers long ago made their point I know that Mike Sabin believes that rates strikers long ago made their point and certainly the committee accepted the point of rates strikers. It has been very hard on fellow ratepayers though that the rates strikers have continued to withhold their rates while having use of the services that others right across the district have been paying for. So although other ratepayers throughout the district have paid their rates the rates strikers have not but have enjoyed the services paid for by others. Relieving these rates must be seen in this light and I commend the ratepayers who have continued to pay their rates despite their concerns and lack of faith in their council over the years. I want to thank them for that and I know that Mike Sabin wants to thank them for that. A compromise has been found and I want to commend the commissioners for finding a way to meet the concerns of the select committee on these penalties.It is true that the Kaipara District Council has had a few difficult years. As well as the rating irregularities the council presided over the controversial Mangawhai sewerage scheme and a considerable increase in debt. This bill has not stopped the proper scrutiny of these decisions; nor does it absolve anyone of responsibility and culpability. It also should be noted that the Office of the Auditor-General has an inquiry into the Mangawhai EcoCare Wastewater Treatment Scheme. It is an independent inquiry of the Auditor-General and the commissioners’ inquiry into matters aside from that including the actions of the former chief executive is also ongoing. As a select committee we were aware of these other inquiries by other jurisdictions which were independent of both us and the council. We appreciate their cooperation in keeping us informed on their progress and on what they felt might come out of their investigations. This bill does not impinge on any of those inquiries under way.The bill is about fixing some of the irregularities so that the council can continue to function and so that services can continue to be provided for the ratepayers of the Kaipara District. Without validating legislation the council would need to refund all the rates that were set incorrectly and set new rates to recover the money work its way through a complex process of resetting rates for each year since 2006 or leave the status of the rates uncertain and open to legal challenge. That is something that would be unacceptable for the majority of those in the Kaipara District who want to move on. Each of these options is unworkable and would leave the council in an untenable financial position. That is why I support this legislation. Members of this House and onthe committee support this legislation because they see that although imperfect it is a pragmatic and practical way through.