Merivale people may hold poll on rates

Press, 5 August 1985, Page 1

Merivale people may hold poll on rates

By

CAROLE

VAN GRONDELLE,

property reporter

The Merivale Precinct Society will investigate the possibility of holding a poll to get backing for its call for a fairer rating system and, if necessary, to seek an early Christchurch City Council election on the rates issue.

The chairman of the society, Mr Kim Pettengell, told a meeting of more than 300 Merivale residents yesterday that the society would also ask a local member of Parliament to promote a bill to change the rating law before April 1 next year. Mr Pettengell said after the meeting that Mr Geoffrey Palmer, the member of Parliament for Central Christchurch, would be approached. Mr Pettengell told the residents, who have been complaining about rate increases of 100 per cent and more, that if they decided to follow the society’s advice and pay only last year’s rates, plus 10 per cent, lawyers had said the City Council could not take legal action until April next year. Two weeks ago the Precinct Society distributed leaflets to Merivale ratepayers inviting them to endorse in principle the proposal to pay last year’s rates plus 10 per cent. Mr Pettengell said last evening that so far 150 positive replies had been received. The Mayor of Christchurch, Sir Hamish Hay, the City Manager, Mr John Gray, the chairman of the City Council’s finance com-

mittee, Mr Matthew Glubb, Cr Mollie Clark, Cr Vicki Buck, and Cr David Close attended yesterday’s meeting, the second on the issue in three weeks.

Mr Pettengell also urged all ratepayers in the City to write to the Valuer-General to seek a special rateable value under Section 25D of the Valuation Land Act, on the premise that their" land value had been artificially inflated by the demand for multi-unit housing. He hoped this action would alert the Government to the depth of feeling that existed in parts of Christchurch over the inequitable system of levying rates, Mr Pettengell said.

The rates issue was a moral one which affected all parts of the City, Mr Pettengell said. This year Merivale was the worst affected area — “it could be New Brighton next time.” Mr Pettengell, referring to a recent circular signed by the general manager of the City Council, Mr Gray, said that the council appeared to accept that the present rating system was unfair.

The circular indicated that the council had long advocated legislative change to this rating system, said Mr Pettengell, but he questioned the council’s speed in imposing a new rate, especially in the light of its apparent $6 million profit last year. “This clearly shows that the Christchurch City Council had no reason to change the rates over last year,” Mr Pettengell said. “They made more profit than they

are seeking (in rates) during this year ($4,551,466). “This gave them the ideal opportunity to leave rates where they had been during the last year ...to lobby central Government and to put in the new rating system that they claim to seek.”

Mr Pettengell said it was not too late for the City Council to change its mind.

Sir Hamish said he had some sympathy with the Merivale ratepayers’ concern about their disproportionately high rates, but said that his prime concern was for the whole of Christchurch.

He emphasised that any change in the “imperfections of the present system” was very much in the hands of the Government.

The proposed goods and services tax would also add insult to injury, he said. This would impose another 10 to 15 per cent on rates — “a tax on a tax.” Submissions by local authorities and citizens against this could help sway the balance. Sir Hamish suggested that it was a strategic time for Merivale ratepayers to make submissions to the Government on the draft legislation of the new Rating Services Bill. This will completely revise the 1959 Rating Act. Sir Hamish reiterated the point that the City Council had no jurisdiction over valuations, which formed the basis of rates and which led to the differences in rates round the City. Valuations were made every five years by the Valuation Department.

He said that a report was being prepared by the council on how the present system of rating could be finetuned to make it more equitable. A uniform annual charge and a greater application of a differential system of rating were both possibilities. Nevertheless, it must be realised that although these would give relief to people in Merivale, they could adversely affect people in other lower-in-come areas.

Sir Hamish argued that revenue-sharing would make an important difference to the financing of local authorities in New Zealand. The Christchurch City Council had supported this for many years, but it was unfortunate that no Government had been prepared to adopt it. Revenue-sharing is in the present Government’s policy. Sir Hamish said that if Christchurch amalgamated into one city this could represent a “very worthwhile saving” of costs — 10 per cent or more. Mr Pettengell said that the meeting preferred not to talk of amalgamation, and said that Sir Hamish had not offered any real solution.

Cr Mollie Clark said that she endorsed wholeheartedly the feelings of the meeting, and that it was time for the Government to examine the entire issue of rates.

Cr David Close attempted to argue that rates were a justifiable form of property tax, and were not a fee for services rendered.

Cr Close got a poor response from the meeting and, to the sound of slow, rhythmic clapping, he hurriedly left the podium. Mr Pettengell said that that was the whole point of

Merivale’s objection: that rates should indeed be a fee for services rendered, and received a round of general applause. Mr Gray said that the Precinct Society’s suggestion that the council use last year’s rates, rather than imposing new rates, in order to give some breathing space to the debate would be illegal under the present Rating Act. He said the law governing the City Council on this issue must be fully understood by the meeting. Mr Gray said that the Merivale rates reflected the enormous rises in property value in the area. The average city rate was $514. According to City Council statistics, 73 per cent of ratepayers paid $6OO or less in rates, and that in round figures 50,000 of the City’s 59,000 ratepayers paid $BOO or less. Many Merivale ratepayers are paying between $lOOO and $2OOO in rates. Mr Gray said that the imbalance would remain while the council retained a valuation-based system.

One ratepayer said from the floor of the meeting that he had been in touch with people in Wadestown, Wellington and in Epsom, Auckland, both similar in property value to Merivale, and learned that they paid $BOO in rates. He said that this suggested that the Christchurch City Council was “a fat organisation, not very well organised.” An elderly woman said that the “movement of commerce” into the Merivale area, in the form of developers who were “mowing down” the old houses, subdividing and building town houses, was responsible for distorting property values in Merivale for quick capital gain.

Cr Buck said that this' year’s increases in rates were unnecessary. “I don’t think there was any need for an increase in rates at all this year,” Cr Buck said.

She said that there was a definite need for more interest and scrutiny of local government affairs by the public, most effectively done through local body elections.

She agreed that the townhouse syndrome affecting Merivale was changiing the nature of the neighbourhood substantially, and that this was responsible for the inflated property values of the area.