No easy answer to unpaid Māori land rates

Gisborne District Council had $3.4m in rates outstanding on Māori land at 31 October 2011. There are no quick fix solutions to reduce this. The issue of unpaid rates on Maori land is one that Councillors are very concerned about, says Finance and Monitoring Chairman Brian Wilson. “Council is given some tools by central government to raise money to pay for the services it provides. These are mainly rates and user charges. Rates are a charge on property value or area. Some are based on benefits received and others are like a tax. The fact that many properties in the northern area are non-productive and multiply owned makes it difficult to recover these rates if they are not paid.”

“However Council provides services in these areas - in particular roads - that have to be funded by someone and where possible, from the people in those areas. While Council understands the financial plight of individuals, each unpaid rate has to be picked up by the rest of the district ratepayers. While the Finance and Monitoring Committee may be looking at this problem, realistically there is no obvious answer to this accumulating debt.”

Council follows routine collection processes to collect unpaid rates. Reminder letters are sent monthly to all ratepayers with arrears in the district. The letters ask the ratepayer to contact Council to discuss options about their overdue rates.

The first and second letters are friendly reminders. The third letter advises that the unpaid rates will be referred to Baycorp to recover if no contact is made or action is taken to address the debt.

Eventually unpaid rates on Māori land are referred Baycorp to recover where there are less than six owners and where we have had no response to our earlier letters. If the nominated trustee gets in touch with us as the letter suggests usually this action can be avoided.

Council’s Finance and Monitoring Committee has asked staff to report back on ways to improve the effectiveness of rates collection particularly on Māori land. A number of options are being considered but how these would be resourced or actioned has yet to be put in front of Council. This will happen before the middle of the year. The review will include how we communicate with Maori land owners including the letters we send.

Māori Land owners are legally obligated to pay a portion of rates based on individual shareholdings. Arrears letters are not sent to all the owners of Māori land; there can be 100 or more owners in some instances and Council does not have contact details for all owners. The arrears letters are sent to the person appointed by the Māori Land Court to receive the rates correspondence or sent to an owner who has contacted Council. Therefore although those who receive the arrears letter are only obligated to pay their portion of the rates it is expected that they will act on behalf of all owners to ensure the rates due are paid.

This role could include communicating with all owners, collecting payments or making arrangements for payment. Council understands that this can be a challenging role due to the complexities of multiple ownership. However, it doesn’t remove the obligation on owners to pay rates.

Gisborne District Council’s corporate services group manager Mike Drummond says that Council has a moral and statutory duty to collect all rates owed. “We don’t want to send people to Baycorp. Each letter we send encourages people to contact Council in the first instance to discuss options about their overdue rates.”

 We understand that rates affordability is a big issue for many individuals and the district as a whole, says Mr Drummond. "Our credit control team try to help anyone who contacts them. Those on low incomes should make sure they apply for the government’s rate rebate scheme. It saves eligible households up to $550 off their rates bill each year. Anyone can ring Customer Services for more information or look on Council’s website.”