$2.2m in rates defaulted

19:44, Jul 07 2014

Millions of dollars of unpaid rates are owed to southern councils as people default on payments.

Across the region $2.28 million is owed in rates - $1,560,931.08 owed to Southland District Council, $211,186.50 to Invercargill City Council and $511,989.48 to Gore District Council.

The figures have surprised the region's leaders, who all said their councils worked hard to ensure everyone paid for their services.

But Invercargill city councillor Graham Lewis said times were tough and some people might be struggling to foot the bill for rates.

However, he asked why people were defaulting when the council offered support to help pay them off in instalments and the Government offered subsidies to those who were really struggling.

"A lot of elderly people who are on very low incomes still manage to pay their rates and I wonder why others can't."


Southland District Mayor Gary Tong said he was astonished by the large amount owing to the district council.

"It's certainly up there."

The council took a hard line on people who did not pay their rates and often sold land to recoup the debts, he said.

"It's a very stringent process to get that money back. I know from past experience, it goes into the hands of debt collectors."

Council director of finance and corporate services Dean Johnston said if properties had a mortgage the banks covered the rates if the owners failed to pay them, but properties without mortgages ran the risk of being sold by the council if people did not pay for an extended period of time.

"We've sold two in the last two or three years, one was a Mongrel Mob house."

The council charged interest on the overdue rates but tried to work with people before it got to that stage, he said.

Gore District Mayor Tracy Hicks said he was surprised by the council's level of rates arrears because his council had tried extremely hard to ensure people paid their rates.

Hicks said the money overdue was earmarked for spending in budgets and it accounted for about 3 per cent of the rates intake.

"Nothing extra would have been bought or not bought, it just makes it more challenging in terms of financing things."

The Gore District Council made contact with those who did not pay their rates in an effort to sort out an effective payment method.

Hicks said the situation was disappointing.

Invercargill Mayor Tim Shadbolt was unavailable for comment because he was in China on council business.

The Southland Times