Friday, December 05, 2014

A funny definition of charity

Like many local authorities, Palmerston North City Council remits rates for sporting and community groups on the grounds that they provide a valuable service to the public. What does that mean in practice? Golf greens for the rich are rates-free, while houses for pensioners are not:

Palmerston North golf clubs are getting rates breaks that pensioners renting Lutheran Homes Trust units cannot access.

City councillors were so bewildered by the revelation at a community development committee meeting this week that they put off making decisions on whether to continue granting remissions at all.

Trust board chairman Buster Kells said neither the trust nor the tenants who had lived in its 33 units in Matipo St in the past 35 years had been able to get rates relief, despite requests for change.

He said the trust was a charity, providing a community service.

But in the current year, it faced rates of $34,383, taking 27 per cent of the rental income it received.

If its elderly tenants owned their own homes, almost all would be able to apply for rates rebates, but the trust could not.

This beggars belief. Providing houses for pensioners is pretty much the definition of "charity", and of definite community benefit. Meanwhile, these golf clubs charge $400 to $1000 a year for membership. While statutorily non-profit, its highly questionable whether an exclusive social club for the wealthy is really deserving of this sort of public subsidy.