The way our rates are calculated is grossly unfair, and in the end will
kill Waiheke.
Under the New Zealand Bill of Rights Act 1990 we have the right to a fair
system, because section 27 tells officialdom that everyone has the right to the
observance of the principles of natural justice, which the House of Lords has
ruled means 'fairness writ large.' And the rights laid down in our oldest law,
the Imperial Laws Applications Act 1988, makes it incumbent on authorities not
to bring ruin upon individuals or communities.
To base rates on assumed property values—which are now only rateable values
with little or no relationship to actual market values—is iniquitous. It means
that someone with an old bach that happens to have been built in what the market
now sees as a prime location will be rated an amount that is highway robbery.
Robbery by a bloated mainland regime with a highway mentality and speculators
for brains.
Many islanders are asset-rich and cash-poor, because that insufferable idol
'market forces' has bestowed a high value on their property that has no
relationship to their modest or minimal incomes. So they are rated out of their
homes, which are bulldozed and replaced by sprawling palaces, which further
increase rateable valuations in that neighbourhood, and so the vicious process
continues like a Canadian wild-fire, until wonderful Waiheke has been destroyed.
That process is accelerated by the fact that the palaces are often only
part-time palaces, just super-baches, so the permanent community is
eroded.
We know all that, but are powerless to stop it under the present regime. If
we had our own council we could institute a rating regime that really would be
fairness writ large, writ very large. So more strength to Our Waiheke's fight to
get us back to having our own council. (In the meantime we could try getting
feisty with the Super Silly and press for a fair system, and when the SS
refuses, as it would, add that to our case for our own council, pointing to the
way the SS has not acted in our best social, economic, environmental and
cultural interests.)
We need a way of creating rateable values that would not drive out those on
minimal, modest and middle incomes, and would militate against the spread of
sprawling palaces. A simple way of achieving that would be to use a formula to
create rateable valuations based on floor-area (and they would be purely
rateable valuations, made only for rating purposes, not exorbitant 'market'
valuations). Income and floor-area are well related: poor people live in modest
houses not palaces; the wealthy do not live in cabins.
In such a formula the domestic floor-area would be the basis of the
calculation. It would exclude external garages, workshops, livestock
accommodation, etc. It would be just the home and any sleepouts (the home-space
would include integrated garage-space).
Under that way of calculating rates the annual general charges would also
be calculated on the same floor-areas.
So the total rates on a property would be the combination of a rate and an
annual general charge, and if the formula was such that it traced out a rising
hyperbolic curve for the whole island (a curve that starts fairly flat and rises
ever more steeply as it assesses the sprawling palaces), the result would be
eminently fair to those on minimal, modest and middle incomes, and also to those
on high and very wealthy incomes. Everyone's rates would be a close match to
their incomes. A thousand dollars to a billionaire is like a dollar to a
pensioner widow. The floor-area basis would also discourage excessive
enlargement of houses, and could be tweaked to make ones above a certain size
prohibitively expensive.
A very fair formula is the one below, in which R is the total rates and F
is the floor-area described above. The first part of the formula, the bit before
the plus sign, is for reckoning the rates proper, and the second is for
reckoning the annual general charge:
R = 0.0005*F³ + F/.5
In words, the rates on a property would be the cube of the floor-area
multiplied by 0.0005, and the annual general charge would be the floor-area
divided by 0.5 (the 0.0005 and 0.5 were arrived at by experimentation, based on
arriving at reasonable figures for average homes, but the most important thing
is that the steepening curve produced by the cube in the first part of the
formula and also by the divisor in the second part, not what multiplier and
divisor might actually be used; those two just found to be good ones).
That would mean, for examples, that properties with houses with floor-areas
of 30m², 50m², 90m², 125m², 300m², and 1000m² would have these rates bills each
year: for 30m², $73.50; for 50m², $162.50; for 90m² (a common size for a
3-bedroom house), $544.50; for 125m², $1226; for 300m², $14,100; and for 1000m²,
$502,000.
The council would first reckon a total for the island then adjust those
individual rates to match the budget it had arrived at after public
consultation. For example, it might be that using that formula the total for the
island would come to, say, $15 million (to give a purely hypothetical figure),
and the council budget might be $20 million (ditto). In that case all the above
figures would be multiplied by 20/15, i.e., 1.333, making them: for 30m²,
$97.98; for 50m², $216.61; for 90m², $725.82; for 125m², $1624.36; for 300m²,
$18,795.30; and for 1000m², $669,166. For a widow on pension in a 30m² cottage
$97.98 has the same sort of relationship to her income as $669,166 does to a
billionaire's.
Most people would be in the lower, flat part of the exponential curve. Excessive houses would be in the upper, ever-steeper parts. (It is obvious that homes with huge areas would face rates that might be prohibitive even for billionaires, so a ceiling could be set at a certain area, at which the rates curve would flatten off.)
That system would end forever the rates regime which if left will corrode
and kill our community and our way of life. That must not happen.
