Maori owing more than $6.1m of unpaid rates

The Western Bay of Plenty District Council has more than $8.3 million in outstanding rates and Maori landowners owe most of it - with one bill worth $308,000. But the money is unlikely to be recovered and the mayor says it is tied by government legislation that is "dumb" and makes "no sense".

Data showed the council was owed $8.36m from 2013. Maori landowners owed $6.1m while $2.2m related to the current financial year and was mainly due to the result of timing of when people paid their rates.

In 2016, the council collected $58.4m from 20,696 ratepayers, up from $55m in 2015 from 20,621 ratepayers. The Local Government Act 2002 determined whether the land was rateable or not.

Western Bay of Plenty District Council chief financial officer Matt Potton said it had "very limited powers to collect these rates". By law the land had to be rated but because Maori land was often owned by multiple owners and often had no commercial value it had to be written off after six years.

"The Maori land portion accounts for 73 per cent of total outstanding rates. Much of this relates to land that cannot be used for any purpose and is multiply-owned.

"The Limitations Act 2010 sets out the time periods for which debts can be pursued and for payment defaults this is six years."

Councillor Mike Lally called for more transparency.

"If Maoris haven't paid their rates on that land, I want to know the reason why and if the law says they don't have to pay then that should be transparent."

Mayor Garry Webber said it was an onoing debate with central government as "the wise people in Wellington make the rules and don't understand the full implications of them. We keep going back to them and saying this is how dumb?

"Legally we have to do it ... we all have to act under exactly the same rules so every council is in this situation. This is not unique to the Western Bay but if it's owned by multiple owners there is another set of rules for them."

A Local Government NZ spokesman said it was only a problem for a handful of councils and "much of this land has no commercial value and thus there is little chance that rates set on the land can be recovered".

The Te Ture Whenua Maori Land Bill was currently before Parliament and contained a number of provisions designed to address the issue, he said.

Katikati Ratepayers Association chairman Thys Polstra said he was "staggered" with the figures and questioned if council was too lenient.

"Dependant on circumstances I'd say that everybody else has to pay so why shouldn't people be up to date?"

Ngati Ranginui Iwi Society chief executive Steph O'Sullivan said she understood the concern and agreed the amount owed "seems enormous" but a very small percentage of the debt accumulated was actual rate arrears and there would be generally good reasons for those.

"The interest that is compounding creates a figure that creates fear and misunderstanding. It's really unfortunate and not helpful for council's balance sheets and it is certainly not helpful for the Maori economy and relationships with local governments suffer under this unhelpful process around rates."

She also acknowledged people may query why their rates could not be struck off after six years but unfortunately there was a low level of understanding of Maori land tenure issues in New Zealand and the implications of having Te Ture Whenua Maori land legislation over the years had been profound.

Ms O'Sullivan supported a call for a change in legislation to allow rate arrears to be written off.

Meanwhile the Tauranga City Council had $1.8m in outstanding rates from previous instalments dating back to 2012-13 which included $1m that must be paid by June 30, 2017.

Revenue team leader Jim Taylor said the remaining amount was under arrangement or under debt collection. The biggest overdue account was $34,374.

In 2016-17, $143m was collected in rates, which included water, compared to $137m in 2015-16.

Top five rate debts
$308,000
$256,064
$254,973
$234,789
$215,968
Note: They are all owed on
Maori land. The actual
rates component is on
average 8.5 per cent. The
remainder is penalties.
Source: Western Bay District Council