Forest Owners say judgment legitimises council's abuse of minority ratepayers and wants law change

The Forest Owners Association wants the incoming government to change the Local Government Act to protect minority ratepayers in rural areas.

The FOA says the recent Court of Appeal judgment, against forest owners in Wairoa, opens the way for local councils to make arbitrary rates decisions against minority landowners.

The Court of Appeal in Wellington dismissed a judicial review against Wairoa District Council, which had imposed rates on larger forest owners five times above neighbouring farms.

FOA President, Grant Dodson, says the judgment, which follows a similar Supreme Court decision, is a dreadful precedent which legitimises councils’ ability to abuse minority landowners under the guise of democratic process.

“Wairoa District Council is responsible for acting in the best economic, environmental, social and cultural interests of the community. Yet the Mayor is trying to force new forestry out of the region with a preposterously high rates bill.”

“He may have succeeded.”

“I know many forest companies will no longer invest in planting in Wairoa, due to the impact the higher rates will have on returns over a 30-year rotation.”

“I’ve seen the new rates bill for just one medium-sized Wairoa forest. It’s barely 800 hectares. The Council will be charging it more than four-million dollars in rates before the owners can harvest a single tree.”

“Yet next door, farmers with woodlots of up to 100 hectares, have been left exempt from the new rate.”

“Wairoa foresters will look elsewhere, which will reduce local farm prices, and lock the land into the single land use option of sheep and beef farming forever.”

“This is an own goal for the farming groups who supported this.”

“The huge differential won’t benefit the Wairoa community. It will also hurt the Wairoa District Council as its future rates take will fall.”

“Wairoa Council ignored independent evidence which we had drawn their attention to, that there was more employment in forestry than hill country farming.”

“Instead, it preferred incorrect assertions from Beef + Lamb NZ that forest employment was far less, because harvesting was so infrequent that harvest workers shouldn’t be counted.”

“The whole reason Wairoa Council said they decided to review its rates system, was it realised that hill country farming was in decline.”

“Yet they then discounted the benefits of forests, which offer economic opportunities and improved diversification and resilience for the local community. Then there’s the stability for erodible land classes which forests protect, and the fact that production forests in Wairoa sequester three quarters of a million tonnes of carbon dioxide a year.”

“The Council dismissed all of this.”

“The Council and most of the pastoral community know forestry is not responsible for most rural community decline. Depopulation has a range of drivers. This is merely a convenient justification to charge a sector, which it inaccurately sees as easily able to afford to pay higher rates”.

Grant Dodson says he appreciates the funding dilemma the Wairoa Council is in.

“I really hope whichever government is in power after the election, that it takes notice of the special environmental and economic vulnerabilities of Tairāwhiti and Wairoa in particular. These were identified by the Parata Inquiry into landuse.”

“The Council is quite right to complain that some forest industry benefits flow out of the region to the industries and ports of Gisborne in the north or Napier in the south,” Grant Dodson says.

“More local forest processing would help Wairoa flourish. These opportunities are clear in the Forestry and Wood Processing Industry Transformation Plan which was unveiled last year. But processors need a dependable supply of wood which the local council is actively discouraging.”

Grant Dodson says at the national level any incoming government needs to address the ‘fairness’ factor identified by the Court of Appeal.

“But the judiciary has now given the green light to any council which resists change and wants traditional farming to be subsidised by other land users. I hope our parliamentarians see the problem and act on it once the election is over.”

“Farmers have been complaining about unfairness in rates setting for years. They are not alone.”

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