1. INTRODUCTION
Council’s 2025 Rating Review (rate burden distribution) finished last week. Our Councillors will deliberate (decide) on the outcome next month, 12 June 2025. Its primary focus was a proposed change from Land Value (LV) to Capital Value (CV) based ratings. This article, an abbreviated version of a detailed public submission, outlines why maintaining LV is the best TCDC ratepayer solution, whilst outlining future recommended rating considerations.
2. POLITICAL BIAS:
TCDC’s consultation documentation refers to subjective, value-based (political) reasons such as “fairer”, “fairer outcomes”, “wealth”, and that other councils have moved to CV-based ratings, to support a biased (recommended) change from LV to CV.
2.1 By statute, TCDC’s consultation documentation must be transparent (and objective). It was not.
2.2 The Local Government (Rating) Act 2002 (LGRA) does not explicitly codify fairness, equity, transparency, or affordability rating principles. These principles are implicitly embedded in a combination of LGRA and the Local Government Act 2002 (LGA):
2.3 Several councils have, over time, moved from LV to CV, but not all. There is a reason for that. Most such councils are characterised by population growth, relatively homogeneous property profiles, full-time residents, and increased density (suburban areas). Simply arguing that TCDC should move to CV because others are doing it is not a valid argument. More importantly, it fails to recognise and account for TCDC’s unique ratepayer profile compared with the “others”.
2.4 A dominant TCDC Ratepayer Class: Absentee batch owners paying full rates but only using infrastructure and services for a short(er) period. District-wise, they represent more than half (+50%) of our 28,508 rateable properties (SUIPs) (Separately Used or Inhabited (rating) Unit) (TCDC figure per Nov 2024). In some Eastern areas, the figure is closer to 70%!
2.4.1 They provide a fiscal injection of money to our district, not just in rate income, but in economic activity and jobs. Many places in our district would not enjoy today’s infrastructure without absentee batch owners.
2.4.2 Nationwide, only selective parts of Marlborough District and the Far North District have such a skewed ratepayer profile. For TCDC, the profile is district-wide!
2.5 Fact: Absentee batch owners already shoulder a disproportionate part of our rate burden today (they do not stress our infrastructure assets and services similar to full-time residents). It follows that they pay disproportionately more than the benefit they enjoy. This conflicts with s101(3) LGA – Funding Principles: Distribution of benefits (those who benefit more should contribute more).
2.5.1 A change from LV to CV further compounds this skewness in rate burden distribution.
3. RECOMMENDATION
For now, TCDC must maintain status quo for rate distribution, providing stability and certainty to all ratepayers.
3.1 A Thorough Review: A Required Rates Reset. Presently, Whangapoua to Whangamata pay 75% of all rates. In the medium term, we should, for rating purposes, divide our district into geographical areas aligned with our Community Board structure, presently five areas (possibly differentiating between Pauanui and Tairua in the future). Each area should have specific rates and charges that reflect the services provided and the needs of the community within that area.
3.2 Rate Components
Simplified, TCDC rates should be easily identifiable and comprise:
• General Rates: Uniform or variable per rateable LV dollar value with variable rates (rating differentials) based on land use, area, location, and provision for ability to connect to Council-provided services;
• Targeted Rates: Applied for specific services or projects benefitting particular areas or groups (water supply, sewerage, stormwater management, or a requested activity that an area wants and is prepared to pay for).
• Uniform Annual General Charge (UAGC): A fixed charge applied to all rateable properties to fund general services (roads, etc.).
3.3 A Novel Idea
Rates are a land tax. Not a progressive income tax. An alternative proposal for a fair, simple and transparent rate burden distribution is analogous to a club membership. A club where all members essentially pay the same membership fee (children pay less, some family rebates, etc.). In this case, the club is called “Property Ownership”.
3.4 We (TCDC) must go back to the drawing board. We need a balanced, thorough rates review debate and consultation. This is too important to get wrong. Too important to rush. We need a rates reset.
Disclosure: Bringing proven expertise, business acumen and common sense to Council, the writer intends to contest the October 2025 Local Government Elections (LGE).
