Wairoa land use has swung heavily towards forestry.
One of New Zealand’s smallest councils has won a court battle against forestry owners who claimed it was acting unlawfully and unreasonably by imposing a rating system that made them pay more than farmers or residents.
Wairoa District Council moved to impose higher differential rates on the expanding forestry industry in northern Hawke’s Bay, arguing that the planting of formerly productive farmland in trees was having “significant negative impacts on the future wellbeing of the district”.
Wairoa District is one of the smallest local authorities in the country, measured by its ratepayer base. The district covers more than 4000 square kilometres but has a population of fewer than 8500.
It is also one of the poorest regions, with a median household income of $42,700 in 2022, less than half the national average.
The main economic activities of sheep and beef farming have been in a long decline, replaced by large-scale conversions to forestry. In 2019 alone, 17 per cent of rurally zoned land in the district was planted in trees or sold to forestry companies.
In 2021, the council changed its rating systems, charging residential ratepayers less and requiring farmers and foresters to pay more.
Under the new scheme, ratepayers who own more than 100 hectares of plantation forest have to pay four times the rates paid by residential ratepayers per dollar of capital value.
Previously, foresters paid $20.70 in rates per hectare, which increased to $36.30 per hectare after the review. The corresponding amounts for farmers were $16.82 per hectare, increasing to $20.65.
With about 77,000 hectares of the district under forest, the forestry sector’s overall rates burden increased from $1.59 million a year to $2.79m.
The New Zealand Forest Owners Association (NZFOA), representing seven landowners who between them control about two-thirds of the district’s forest plantations, sought a judicial review of the council’s new rating system in the High Court.
Justice Christine Grice dismissed their application, so they took their case to the Court of Appeal, which has now also found in favour of the council.
The council argued that forestry did not sustain local communities and businesses to anything like the same extent as farming.
Wairoa Mayor Craig Little has previously said that “whereas there were previously two or three families living on a farm, there is now none”.
The council said that major processing plants for logs were located outside the district and planting gangs and other contractors to the industry usually commuted from Gisborne or Napier.
NZFOA disputed that forestry was a cause of Wairoa’s decline and argued that the industry benefitted the district in various ways.
Its representative, Keith Dolman, cited a report prepared for a forestry company, Pan Pac Forest Products Ltd, which attributed the decline to over-reliance on the sheep and beef industry, which has been in decline for decades following the removal of agricultural subsidies in the 1980s.
He also contended that Wairoa’s high unemployment rate was caused by complex socioeconomic factors which the forestry industry could not influence.
He said that the industry employed the equivalent of 218 full-time staff in Wairoa and would like to employ more but jobs offered locally are not being filled.
The Court of Appeal judges said that “it may be” that farming’s decline pre-dated forestry’s growth, but this could also be because higher value use for marginal rural land – forestry - had something to do with it.
“What matters for our purposes is that the cause of the council’s undoubted need for new funding sources is an issue on which there is room for differences of opinion and the exercise of judgment on the council’s part,” the Court of Appeal said.
“We are not persuaded that the council’s decision to discriminate among forestry interests was unfair, still less that it was so unfair as to justify intervention on judicial review.”
Ric Stevens spent many years working for the former New Zealand Press Association news agency, including as a political reporter at Parliament, before holding senior positions at various daily newspapers. He joined NZME’s Open Justice team in 2022 and is based in Hawke’s Bay.