This Supplementary Order Paper (SOP) amends the COVID-19 Response (Further Management Measures) Legislation Bill (the Bill). The amendments are to Part 5 of Schedule 15 of the Bill, which relates to amendments to the Local Government (Rating) Act 2002 (the Act). New clause 17A inserts new sections 46A and 46B into the Act.

This SOP proposes amendments to a local government statute to provide relief to ratepayers during the COVID-19 crisis. As a result of COVID-19, the New Zealand economy has declined significantly resulting in relief for households and businesses being a part of the suite of measures provided by the New Zealand Government in response. For households and businesses experiencing a difficult or uncertain financial future, relief from the annual increase in rates demanded by a local authority will provide additional financial assistance. This SOP contains amendments that would implement what is known as a “rates freeze”. It is reasonable for each local authority to make decisions to reduce unnecessary expenditure as a result of the significant changes in domestic and international circumstances, as well as the reduced ability of ratepayers to pay their rates. While some may consider a rates freeze to unnecessarily constrain a local authority’s ability to fund projects that provide an economic stimulus to its community, it should be noted that local authorities will, in some respects, benefit from reduced borrowing costs resulting from recent global economic events.

Proposed new section 46A limits the amount a local authority can invoice a ratepayer in the 2020/2021 financial year to the amount invoiced in the 2019/2020 financial year. An exception is provided where the use of a rating unit has changed during the 2019/2020 financial year. In that exceptional circumstance a local authority would not be constrained in the amount invoiced. Proposed new section 46B provides that a local authority must amend its long-term plan to take account of the new limitations placed on 2020/2021 financial year invoices. The process a local authority must follow to make these amendments will be made in accordance with new section 93DA of the Local Government Act 20002 proposed in Part 3 of Schedule 15 of the Bill.

The new section 46A limiting rates invoices for the 2020/2021 financial year is repealed on 1 July 2021. The new section 46B is repealed on 1 August 2020, aligned with the repeal of new section 93DA of the Local Government Act 2002.