Rates inquiry must include analysis of flat-tax policies that hurt low and fixed income ratepayers
The announcement that the Government will set up an independent inquiry into issues around local government rates
funding has been welcomed by Manurewa resident and community leader Daniel Newman.
Mr. Newman, who is also Chairperson of the Manurewa Community Board, said the terms of reference for any inquiry must
include an investigation of rating policies that require low and fixed income ratepayers to cross-subsidise wealthy
property owners.
“Today I have written to Local Government Minister Mark Burton outlining my priorities for any inquiry into issues
around local government rates funding. This includes a call for any such inquiry to investigate the use of uniform
annual general charges as a flat-tax rating tool.
“This year the Manukau City Council ignored the officer’s objective evidence as well as the representations of people
such as myself, and imposed a $300 uniform annual general charge, the so-called ‘Quax-tax’. Thanks to the imposition of
the $300 Quax-tax, which was championed by Cr Dick Quax of Botany, thousands of low and fixed income ratepayers in the
poorest suburbs of Manukau City now cross-subsidise the City’s wealthiest property owners.
“There is nothing equitable or progressive about a rating system that requires low and fixed income ratepayers to
cross-subsidise wealthy property owners. Thanks to the imposition of the $300 Quax-tax, rates as a proportion of
household income is now highest for ratepayers in the four wards (Manurewa, Mangere, Otara and Papatoetoe) that are home
to the poorest residents.
“Any inquiry into local government rates issues must address this outrage. Low and fixed income families, people who can
least afford to pay are needlessly being forced to pay an inflated rates bill. Couple that with inflated charges levied
by the Council’s new water and wastewater company, Manukau Water, and it is not difficult to see why so many New Zealand
Superannuitants in particular are facing severe financial hardship,” Daniel Newman said.
In writing directly to the Minister of Local Government, Mr. Newman called for any inquiry to hear evidence in
communities such as Manurewa.
“There are many local ratepayers who would be only too willing to come forward and express their concern about the
impact of the Council’s new rating policies. I think local people presenting evidence about the reality of
Council-endorsed rating abuse would add to the credibility of any future inquiry,” Mr. Newman said.
End.
About Daniel Newman
Daniel Newman is a 29 year old resident of Wattle Downs, Manurewa. He is the chairperson of the Manurewa Community
Board, serving his first term. He strongly opposed standardised rating policies which target low and fixed income
ratepayers.
Copy of Daniel Newman’s letter to the Minister of Local Government follows.
Daniel Newman
24 August 2006
Hon. Mark Burton Minister of Local Government Parliament Buildings WELLINGTON
Government inquiry into local government funding issues
Dear Minister
I note the Government’s intention to establish an independent inquiry into issues around local government rates funding.
I understand that the Government will develop the inquiry’s terms of reference in consultation with all parliamentary
parties, and that the agreed terms of reference will be announced in due course.
I request that the terms of reference for any future inquiry into local government funding issues allow for a thorough
investigation of the following matters –
the use of uniform annual general charges as a flat-tax rating tool pursuant to section 15 of the Local Government
(Rating) Act 2002;
the use of a flat-charge regime by council controlled organisations such as retail water and wastewater companies; and
the possibility of extending the Rates Rebate Scheme administered by the Department of Internal Affairs to cover general
charges levied by council controlled organisations.
I believe the credibility of any future inquiry would be significantly enhanced if the inquiry team travelled New
Zealand to hear evidence from individual ratepayers. As Chairperson of the Manurewa Community Board I can advise that
many of my constituents would be only too willing to present evidence about the impact of the Manukau City Council’s
regressive new rating policies.
I welcome the opportunity to discuss any issue raised in this correspondence.
Thank you in anticipation.
Yours sincerely
Daniel Newman
ENDS