Stop this wretched system now or we're stuck with it

Comment by DAVID THORNTON*

The huge Auckland Regional Council rate increases are provoking a level of anger and frustration unparalleled in recent times. And individual ratepayers are desperately seeking ways to protest effectively.

When the new law was proposed, it was generally viewed as a good thing because with direct rating regional councils would become fully accountable. Ratepayers would see what they were getting for their rates and would hold accountable those who were setting them.

The ARC set about its new role with gusto. Now we see the result. Those councillors who supported this vicious system will be held accountable at the next election. But what can Joe Citizen do now by way of effective protest?

Under the new legislation, the ARC can review its original decision and reset its rates - as long as it is prepared to admit it got it wrong.

In fact, that admission has already been made. The ARC has said it will review its rating policies and methods this year and introduce policy changes next year.

Maybe the Auditor-General will tell the ARC it got it wrong. Maybe the Government will be forced to step in and order a review of the council and, hopefully, force it to change its system. Meanwhile, are ratepayers just expected to pay up?

The number of regional ratepayers - about 450,000 - makes the ARC the Southern Hemisphere's largest rating body. And therein lies the potential strength of individual ratepayers to cause unprecedented havoc.

What if most of this huge band of ratepayers acted individually? What problems we could create for our over-zealous tax-gatherers.

But the threat of withholding payments is bringing out the bully-boys. They have threatened to take money out of the bank accounts of people who do not pay. That threat was squashed almost as soon as it was made but the damage has been done and some people still believe the ARC can do this.

Don't be bullied. The ARC cannot either get into your bank account or put a lien on your wages - only a court can do that. And there are many hurdles to jump over before the council can take you to court.

So what happens if I don't pay my rates on time? A 10 per cent surcharge is applied immediately. In the case of the ARC, this would appear to be 10 per cent of the total rates bill. A further 10 per cent can be added if the rates remain unpaid after six months.

I have a mortgage and the ARC can recover unpaid rates from the first mortgagee if the owner does not pay, but cannot do this "earlier than November 1 in the financial year following the year in which the rates were first assessed", according to the 2002 Local Government (Rating) Act. This would seem to be November 1, 2004 for this year's ARC demand.

If there is no mortgage on the property, the council can, as a last resort, sell the property - but that can only happen after a protracted process, which could take years, and is unlikely to happen for a few hundred dollars.

What have I got to lose if I don't pay? A 10 per cent surcharge - less than $30 in my case. But for others it's not so simple. People are generally law-abiding and accept a responsibility to pay a fair and reasonable rates bill. What then are their options?

The ARC is offering only two alternatives for payment:

* Payment of the full year's rate in one instalment (with a derisory 2.5 per cent discount for early payment).

* Payment in 10 equal monthly instalment by direct debit.

Many do not want to pay by direct debit; they distrust it. People should have the option of making their own instalment payments by cheque or credit card, by mail or by cash at a post shop on the basis of 10 per cent of the total bill every month for 10 months.

If people pay this 10 per cent monthly, by cheque, by the due date, the ARC will have no choice but to accept it.

What action would the council take if people send 10 per cent cheques? Take them to court? Unlikely. But the ARC will be brassed off at the prospect of banking tens of thousands of $20 or $30 cheques every month.

This is an option for people who want to oppose the ARC but are not confident enough to take part in a full rates strike.

Other suggestions being made include paying only the same rates as last year. Another North Shore ratepayer is going to pay the general rate and the bio-security rate, but not the transport rates.

A Herald editorial has supported the measured protest of paying by drip-feed - the 10 per cent solution. But it cautioned against an all-out rates strike - that would be civil disobedience.

But as days go by and the ARC becomes more entrenched in the defence of its wretched system, the cause and the time for civil disobedience may be upon us.

The ARC plans to double its rate take over the next seven years. If we don't do something now, we will be stuck with the system it is introducing.

* David Thornton chairs the Glenfield Ratepayers and Residents Association.