Consequences of council spending

There is a growing trend among New Zealand local authorities, a trend sweeping the country where elected councillors are starting to believe the money they spend comes without consequences.

The latest, and most blatant example, comes from Christchurch. Here, a left-leaning city council, led by a former Labour Party MP and now Mayor Lianne Dalziel, has confirmed a plan to bring forward $253 million in funding for a covered stadium in Christchurch by two years.

The stadium decision is part  of the council’s signing off of its $10.6 million budget for the next 10 years. Rates will have to increase by 53% over 10 years and ratepayers will also have to pay a special levy of about $6.52 a year for 10 years to fund the council’s $10 million share towards reinstating the ChristChurch Cathedral.

It is important to note the council has identified all costs as its share, rather than the share provided by ratepayers, some of whom still have nowhere to live in safety and warmth post-quakes.

The Auckland Council, also led by a former Labour MP, has wrapped up a new 10-year budget that includes a regional fuel tax of 11.5c a litre and holding rates at 2.5% for the next two years.

Mayor Phil Goff has said the budget will get Auckland moving, with investment of more than $26 billion over the next 10 years to reduce transport congestion, unlock housing development, clean up beaches and protect the environment.

In another preview of the Wellington City Council’s 10-year plan, Mayor Justin Lester, a protege of the Labour Party, says a rates increase has been set at 4.3% but he wants to bring it down to 3.9%. He also wants to start charging for weekend parking, but at a reduced rate as a way of keeping rates down.

One of the oldest tricks in the book is proposing a rates rise of eye-watering proportions, then lowering it as ratepayers breathe a sigh of relief.

Closer to home, Waitaki District Council ratepayers can expect rate rises of 3.64%, 4.05% and 4.18% over the next three years after the council signed off on its 10-year plan this week. One thing that can be said about Waitaki is how frugal the council has been with its level of debt, using ratepayers rather than banks to fund its expansion.

In Dunedin, the city council has signed off on its "ambitious" $850 million plan for the next 10 years. Apart from Cr Lee Vandervis, all other councillors voted in favour of adopting the plan which includes large projects such as the central-city upgrade, an architecturally designed walking and cycling bridge, and upgrades of the city’s ageing wastewater infrastructure.

Ratepayers will be left wondering how many times successive councils can talk about the city’s ageing wastewater infrastructure without doing more about it.

Again, just as in Christchurch, Wellington and Auckland, ratepayers are being asked to pay for some vanity projects as councillors seek to leave a legacy — as if cycleways were not enough.

Dunedin rates will be increased by 7.8% in the first year of the plan, fees and charges will increase by an average of 4%, and the council will borrow an extra $135 million.

One has to wonder who will end up paying the increased debt, because, although Dunedin’s population is growing, it is doing so slowly.

Disturbingly, the Local Government (Community Well-being) Amendment Bill will allow councils to spend rates money and levy property developers to provide a wider range of social and cultural activities. The Otago Daily Times has a long history of supporting regional innovation and development, but the time has come for councils to consider what they were elected to do.

Young ratepayers will be struggling to service their mortgage debt, along with increased rates. Those without their own houses will find their rents increasing as rates rise. Older ratepayers, those tied to pension income only, will need to make sacrifices to survive — all the while paying for things they are unlikely to use.

Further loose spending by councils is simply unaffordable to most ratepayers, no matter where they live.


In a city that has becoming smaller in a sense, the best option is to work at gradually increasing in size again, rather than pursue a sudden recreation of what was lost.