“The Court of Appeal has recognised the difficult decisions that we as a council had to make and the judgements we had to reach in setting rates for the district. That is never an easy job, but ultimately, as elected members, we are there to make the hard decisions on behalf of and for the benefit of our Wairoa community.
“I am proud of our council and the hard work that staff have put into this process. It is sometimes difficult for small councils with limited resources to stand up to large corporates such as those represented by the NZ FOA. We made sure the community was given every opportunity to participate in this decision-making process, and ultimately, council decisions that are made and tested through public participation in those decisions are all the stronger for it.”
Mr Little said the council could point to the fact that it was truly a decision made for and on behalf of the community of Wairoa district.
“It is that community focus by council and staff that was decisive.”
The decision is considered to be of high significance for local government as, while it reinforces long-standing principles in relation to local government rating, it is believed to be the first decision involving the imposition of an additional rating burden as a result of the “disbenefits” of an industry.
In this case, those disbenefits arose from a loss of downstream benefits formerly provided by the farming sector, which is being displaced by the proliferation of forestry in the Wairoa district.
“This should not be construed as Wairoa District Council being anti-forestry,” Mayor Little said.
“Forestry is an important industry nationally, but often those benefits are experienced at a national or regional level while the costs and burdens are imposed on communities at a district level.
“That is certainly the case in Wairoa district. We are hopeful that the NZFOA and its members work with us and the community of Wairoa. There is certainly a lot of ground for the industry to make up, particularly in light of the Ministerial Inquiry into Land Use which looked into the effects of forestry in Tairāwhiti and Wairoa. We look forward to working more constructively with the industry.”
The NZFOA challenge focused on the basis that any rating differential paid by forestry should reflect the benefit received by that industry and that the council was required to show a direct and rational connection between the benefit received and the costs imposed on the forestry sector.
In a decision released by the Court of Appeal on Friday, August 24, the court dismissed the NZFOA appeal and, in doing so, rejected the argument put forward by the association that some form of cost-benefit analysis accompanied by a direct linkage was required before a differential could be imposed.
The Court of Appeal upheld the approach taken by the Wairoa District Council, which took into account the funding needs of the district, the need for services to be provided and the need for decisions to be made taking into account the social, cultural, economic and environmental wellbeing of the Wairoa community, both now and into the future.
