Residents revolt over rates

The first of an unhappy and angry group of Palmerston North residents have told city councillors their proposed rates increase for next year is insane, unaffordable and even cruel.

The council has received 340 submissions about its proposed budget, and few discuss anything except the rates increase.

Their beef is not only with the 8.3% total rates increase, but the way that is shared, with huge increases in land values driving rates increases of 20% and more for some homes.

Hokowhitu resident Paul Perry was the first to speak to his submission at the opening committee of council hearing yesterday. He said a glance through the submissions showed the council had a tiger by the tail, and was confronted by a lot of unhappy and angry people.

Many submitters had used the council’s online tool to find out how revaluations late last year would affect their future rates bills.

They came up with figures including $1000, $900, $500, and an extreme example was $1708.

Those who had done the sums found increases of 21%, 30%, and up to 37%.

Submitters used words including crippling, scandalous, ridiculous and outrageous.

Families feared their budgets could not withstand the increases, and older people believed they would not be able to afford to stay in their homes of many years.

Many who had larger sections and the biggest leaps in land valuations felt they were being penalised for having backyards or gardens.

Many said the council should cut its spending, and ‘‘get rid of the frilly s...’’.

Some called for a rates freeze, or for a uniform increase, or a new council after October’s elections.

And others, like Perry, said the problem was the council’s land-value based rating system.

Perry had many times advocated for a switch to capital value rating.

He said it was a fairer way of spreading the rates burden, as it had a better, if not perfect relationship to people’s ability to pay rates.

People would have been less angry if the council had moved to capital value rating, like 70% of New Zealand’s other councils, he said. He could not understand why the council kept postponing that debate.

Perry said it did not make sense to base rating on land values, when what people really valued about their properties was the house they lived in.

In his case, the value of his actual house only made up only 5% of the property’s total capital value, even though it was insured for much more.

Perry said although the rationale for higher land values seemed to be based on the assumption sections were big enough to be subdivided, many people had found that would not be possible.

They were being penalised for having fruit trees and vegetable gardens and space to make compost.

Perry said another aspect of the problem was that councils were restricted from gaining much revenue from anything other than rating properties.

He said local government should lobby central government for change, so councils could get some income from something like petrol tax or GST. Mayor Grant Smith agreed, and urged Perry to take that argument to MPs and their Government colleagues.

Many [submitters] said the council should cut its spending, and ‘‘get rid of the frilly s...’’.