In what has been described as a very significant decision, the High Court has upheld the comprehensive review of the Wairoa district rating system undertaken by Wairoa District Council.
In 2021, Wairoa District Council undertook a review of its entire rating system which sought to alter the allocation of the rates burden from potentially lower income residential properties to properties with higher capital values and greater potential for income generation. The review, commenced in 2020 using the special consultative procedure prescribed by the Local Government Act, sought to engage with the wider Wairoa community and bring all voices to the table. The process generated substantial interest from the Wairoa community but was opposed by members of the forestry sector who claimed that the new rating system would result in increased rates payable by forestry interests. The New Zealand Forest Owners Association Inc, an incorporated society representing seven very substantial forestry owning companies applied for a Judicial Review of Council's decision by the High Court and a hearing of the judicial review proceedings was held on 14 and 15 February 2022.
The application for judicial review sought to overturn council’s decision on five separate causes of action. In a decision issued on 28 April 2022 the High Court rejected all five causes of action argued by the New Zealand Forest Owners Association Inc.
“I am absolutely delighted with the decision” Mayor Little said. “Undertaking a complete review of our rating system was a huge task. Not only is this decision a credit to all of the hard work by Council and Council staff in undertaking this rating review but it is an endorsement of Council's approach which sought to protect the interests of the Wairoa district community.”
The rating review moved from a mix of capital and land value-based rates with a large number of fixed charges to a capital value-based rating process together with differentials to accommodate greater impact of some activities. An example of this is the impact on rural roads of forestry activities. “Forestry tracks have a huge impact on our rural roads. About 25% of Council's entire budget is spent maintaining rural roads and the additional impact on these roads from forestry traffic needs to be taken into account.” Mayor Little said. These increased roading costs, together with the move to Capital value rates and the move away from fixed charges, have resulted in changes to the rates payable by high-value properties including the substantial forestry interests represented by the New Zealand Forest Owners Association Inc. The old rating system including the reliance on fixed charges saw residential properties paying the same fixed charges as multimillion dollar rural and forestry operations and resulted in a rating burden that was unaffordable for many low-income residential properties.
“This is not just a win for Wairoa District Council, it is a win for the whole Wairoa community. We have a large district and a small ratepayer base with median incomes that are below the national average. The Court has endorsed the Council's work in ensuring that rates are allocated fairly and are affordable for the community.” Mayor Little said, this is not about being anti-forestry, it's about acting in the best interests of the Wairoa community. I hope we can continue to work constructively with our community and with the forestry sector for the best interests of the district.”
5 May 2022
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