Land value tax system is 'archaic' - councillor

CATHIE BELL
Last updated 11:30 20/08/2012
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Rating by land value is a crude mechanism and an archaic tax that takes no account of people's ability to pay, Marlborough District councillor Francis Maher says.

But the council was forced to use the system because the Government would not change the law, he said.

He and fellow Wairau-Awatere ward councillors Peter Jerram and Geoff Evans represent the parts of the district that have had the biggest rates increases, affecting people living outside the Blenheim town area and rural ratepayers, mainly Awatere and Flaxbourne farmers.

Cr Maher said the council rating system was driven by the Local Government Act, which based it on land valuation.

"It's a pretty crude instrument. We try to soften it with different rating areas and targeted rates for projects that benefit particular areas, so that an Awatere farmer isn't paying for Blenheim's sewerage.

"We try to minimise it. It's not perfect - it's a horrible system."

Cr Maher said he had "gone on about it for years" but the Government was in charge of the legislation and did not have the will to change it.

"It's an archaic tax based on land values that has no basis on people's abilities to pay. Just because people own a lot of property doesn't mean they have an ability to pay."

Cr Evans said he backed the call to change the rating system, saying one based on capital value should be looked at. He had proposed measures that would have eased the impact on rural ratepayers this year but other councillors had not supported them.

The rating review councillors would be doing later this term should be accelerated so that changes could be made, he said.

"It's unacceptable that rates are so volatile. People can't make sound business decisions when you don't know where your rates are going to be."

Cr Jerram said the Blenheim vicinity rating area where he lives, and the general rural rating area, were the two zones that included substantial areas of grapeland seriously devalued in the three-yearly property revaluation.

Within those areas, the proportion paid by individual ratepayers had shifted significantly, depending on how much each property was valued.

"It's complex and really hard to explain.

"It's a bit of a one-off because we've gone through an extraordinary boom in grapeland in the past 20 years. That's now come to a shuddering halt."

He understood ratepayers' concerns, he said.

"It's horrible when you suddenly get a big ratings increase. Unless we change the rating system, there's not much we can do about it."

Blenheim ward councillor and rates review committee chairman David Dew said he had been contacted by two or three people, one with a rates increase of 60 per cent.

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"You can't help but feel sorry for people but there's nothing much we can do about it - not in any meaningful way," he said.

- The Marlborough Express

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