MP's figures 'not the full picture'

00:08, Nov 01 2012

Figures used by Nelson MP Nick Smith to support claims of rates increases in Nelson and Tasman were accurate in raw terms, but were of little value in understanding the "full picture", Local Government New Zealand chief executive Malcolm Alexander said today.

The councils said yesterday the average rates rise over the last decade was 8 per cent as opposed to the 13 per cent annual increase in Nelson and 12 per cent in Tasman, as quoted by Dr Smith in a letter to constituents on a range of matters.

Mr Alexander said the figures had not been adjusted to take into account growth in population or the size of the business sector over the past decade.

"Subsequently, the percentage increases cited are of little value in understanding the full picture because they have not been adjusted to account for significant changes in the rating base.

"Nelson and Tasman residents can have confidence in the information on rates provided by their councils," Mr Alexander said.

Dr Smith's figures sourced from Statistics New Zealand were compounding calculations based on total rates income for Nelson and Tasman from 2001 to 2011.


Tasman district mayor Richard Kempthorne said it was true that rating income in Tasman had increased at an annualised average of 12 per cent from 2002-2010, but that was not the same as the average annual rate increase people received in their rates notice.

Dr Smith acknowledged the councils' figures today, but was standing by his claims.

"I'm not interested in an ongoing stoush with the mayors, but there's no question that rates in both Nelson and Tasman have increased over the last decade by more than double the rate of inflation."

Nelson mayor Aldo Miccio said the re-classification of water user charges in Nelson from 2006 had affected Dr Smith's figures.

"In 2006, water charges were reclassified from a user charge to a rate, which showed in the data the council reported to Statistics NZ.

"This has significantly skewed the compound average Dr Smith is using. He is comparing apples to oranges. The real average rates rise is well below what he has stated - 8 per cent for Nelson City from 2002 through 2010," Mr Miccio said.

Rates income leapt $10 million from $22m in Nelson city from 2005 to 2006 when water rates were included, and have had a year-on-year larger increase than before 2005.

Statistics NZ local government statistics manager Peter Gardiner said that before 2006 water charges were not included in Nelson city rates and a note had been included on its website to explain this. He said if Statistics NZ had not included water charges in Nelson the rates income figure for 2011 would have been $40.7m, instead of $51.1m.

"That is a more direct comparison with the figures from before 2006.

"Likewise, if we excluded water charges from Tasman District Council's rated figures, the figure for 2011 would have been $46.8m, instead of $52.6m," Mr Gardiner said.

Mr Miccio said it should also be noted that in the years when rates increases were high, the council was focused on improving core infrastructure, such as the Tantragee water treatment plant.

Dr Smith said there would always be difficulties over what were rates and what were council charges.

"Water rates should be included because they are a significant part of most people's rates bills."

He said the broader issue was the focus on measuring rates increases by percentage increases, and the fact there was no standard method for measuring them. He is calling for a national standard as part of local government reform, as fair and credible rates comparisons were of high public interest.