The Wairoa District Council is celebrating the High Court upholding a comprehensive review of its rating system – but the decision may yet be appealed by the New Zealand Forest Owners Association (NZFOA).
In 2020 the council began a review of its rating system, aiming to change the allocation of the rates burden from potentially lower income residential properties to properties with higher capital values and greater potential for income generation.
The process was opposed by members of the forestry sector on grounds including that the industry already pays its way in the district through rates, direct road-specific contributions and in-kind support and it will continue to do so.
In its submission to the council at the time, the NZFOA said the current rate revenue per hectare within the Wairoa district is significantly higher when compared to rates its members pay for forestry land in other districts.
The NZFOA applied for a judicial review of the council’s decision by the High Court, with the proceedings held in February.
In a decision released late last month, the court rejected the NZFOA’s application.
Wairoa Mayor Craig Little said he was delighted with the decision.
“Undertaking a complete review of our rating system was a huge task,” Little said.
“Not only is this decision a credit to all of the hard work by council and council staff in undertaking this rating review, but it is an endorsement of council’s approach, which sought to protect the interests of the Wairoa district community.”
“About 25% of council’s entire budget is spent maintaining rural roads and the additional impact on these roads from forestry traffic needs to be taken into account.”
Craig Little
He said the rating review moved from a mix of capital and land value-based rates with a large number of fixed charges to a capital value-based rating process, together with differentials to accommodate greater impact of some activities, for example, the impact on rural roads of forestry activities.
“Forestry tracks have a huge impact on our rural roads. About 25% of council’s entire budget is spent maintaining rural roads and the additional impact on these roads from forestry traffic needs to be taken into account,” he said.
“These increased roading costs, together with the move to capital value rates and the move away from fixed charges, have resulted in changes to the rates payable by high-value properties, including the substantial forestry interests represented by the New Zealand Forest Owners Association Inc.
“The old rating system, including the reliance on fixed charges, saw residential properties paying the same fixed charges as multi-million-dollar rural and forestry operations and resulted in a rating burden that was unaffordable for many low-income residential properties.”
A NZFOA spokesperson said there are potential grounds to appeal the court’s decision and it is taking further advice on that.
“Until we have received and considered that, there’s a number of parties, not just the FOA, we make no further comment other than that we believe that there are potential grounds for appeal,” the spokesperson said.
