• Video: Regional Council to decide on changing rating system from land value to capital value

Video: Regional Council to decide on changing rating system from land value to capital value

The Hawke’s Bay Regional Council is set to decide on changing its rating system from land value to capital value at a meeting tomorrow.

This comes after a controversial consultation process that was held over the Christmas/New Year period. Questions have been raised about the timing of the review, which has coincided with the holiday period with the closing date for feedback being 28 January.

The HBRC asked for feedback on how the general rate is funded - moving from land value to capital value for the general rate, as well as how the Regional Economic Development rate is allocated. The council also wants to know how the council should rate flood protection and drainage schemes; as well as passenger transport; Freshwater Science changes, including a new targeted rate; simplifying sustainable land management, biodiversity and biosecurity rates; and improvements and additions to rates remission and postponement policies.

About 500 submissions were received with about 90 per cent opposing the change.

Hinewai Ormsby, has stood by the council’s process, claiming that some of the criticism had featured inaccurate numbers about a proposal to change how rates are assessed.

She has also told Hawke’s Bay App that a review into how the Council sets rates will not change how much revenue the council makes from rates.

The Council’ rates take for 2023-24 is set to be $47m. It is understood however, that residential ratepayers could see their rates increase, while farmers would see a decrease.

Former MP for Tukituki and local businesswoman Anna Lorck has been one who has criticised the process of the consultation.

Speaking to Hawke’s Bay App today, Lorck, who describes herself as a regional ratepayer, said: “I think, at a time where everyone's focusing on rate increases, going ahead and trying to switch how the Regional Council rates for its general rate, moving from land to capital values is very poor timing.”

“They made matters worse when they decided to go out and consult just prior to Christmas.”

“And to be honest, unless you were actually on your Facebook page or even checking, you wouldn't have even known it was happening. So far over 500 people now, though, have made submissions. I went to the submission hearing. And when 90% are against such a controversial proposal, I just don't think that the council has any other option but not to support this proposal.”

Lorck, a former Labour MP, said the change would be a double hit on hardworking households.

“And as one farmer said in his submission, he might personally come out okay on a capital value switch, but it's the impact that it has compounding on everyone, on commercial businesses, on anyone who owns capital, and also on capital venues increasing.”

“So I just think, from the submissions that were made, this message has been clear, the rate payers have spoken, and the Regional Council needs to do the right thing and not make the switch.”

In a submission to the Council, John Bostock, the owner of Bostock New Zealand, said that the proposal will increase costs for all growers and farmers and “is completely unsustainable”.

“What the Council needs to understand, raising the capital charge will hit all growers and farmers alike. For every apple tree, vine, animal and forest grown on the land requires matching capital expenditure in freezing works, packhouses, cool stores, wineries and timber processing, etc.

Bostock says the only solution is for the HBRC to cut its costs, stop rate rises – “not just change the chairs on the Titanic”.

“We have just experienced the worst Cyclone in 150 years. The fabric of HB horticulture has been damaged while markets and costs conspire against growers.”

“If HBRC blindly pushes up costs for growers and farmers, the council will quite quickly end up with less rates as horticulture and farmers will reduce production.”

Bostock says the best course of action is a nil rate rise and for HBRC reduce waste, cut staff, and focus on core activities.

“The HBRC has reserves for a rainy day. It is now ‘pouring with rain’ and time to use capital reserves on capital projects such as urgently needed flood protection. If the HBRC doesn’t heed this advice, there will be a strong reaction.”

He says that politicians picking winners by rating the productive sector to give to the unproductive or wishful thinking is “total folly”.

“If the bureaucrats in council were capable of creating a profitable enterprise, they wouldn’t be living off ratepayers.”