Local body rates

Ever a likely-lad political opportunist, Rodney Hide sees the royal commission's report on the governance of greater Auckland as providing the impetus for his reforms of local government throughout the country, reforms which he failed to convince Parliament were necessary last year.

If parliamentary "perk-busting" was the stimulant for the high public profile he now enjoys, reducing the rates burden on householders seems to have become his new excitant.

It is one which is bound to catch the attention of people rightly fearful of the never-ending rises in local rates, as well as those who find the labyrinth of council regulations and consent processes to be expensive, time-consuming and a frequently wasteful frustration.

Mr Hide has described his principal goals as being to "clean up" the Local Government Act to reduce the burden it places on local bodies, and to make local government decisions "transparent" and "accountable".

This is fine-sounding rhetoric, but what exactly does the Minister for Local Government really mean? There can hardly be any argument that central government's customary preoccupation with regulating everything has led to an excessive and costly abundance of "red tape" and officialdom, and that negotiating this minefield is greatly unproductive to the economy, although it does keep quite a few people in employment.

The Clark Government largely assisted in creating this expansive universe by giving quite sweeping powers to local government, including the power of general competence, ostensibly in the interests of devolving power from central government and giving people a greater local voice.

The government failed to provide the additional funding for these changes so the burden has fallen on councils which, throughout the land, have raised their rates accordingly and sought money elsewhere, usually through trading enterprises.

It is Act New Zealand party policy to impose limits on what local bodies can and cannot do, in effect limiting them to their core activities, and capping rates at the rate of inflation unless there is a specific consent by ratepayers, presumably by way of referendum.

And, to a large extent, Act is justified in its suggestion that local councils have no role in running trading enterprises, but should stick to necessary services provision that private enterprise cannot or will not indulge.

This is theoretically achievable but it must be balanced with the need for councils to obtain a clear understanding of community wants and needs, and obtain the mandate to proceed in fulfilling them.

It is also necessary for ratepayers to understand that were Mr Hide's party policy to proceed, there would be many things that simply would not happen, many costs that would become unaffordable, and that these might involve such things as maintaining community housing, libraries, art galleries and theatres, sports facilities including stadiums, providing more than basic bus services, keeping the environment in a state of health, and so on.

The provision of cost-efficient services might really mean, in some centres, very few "extras" of any kind.

Of course, "user-pays" functioning purely as an add-on to communally-funded basic services, such as maintenance of roads, provision of water and sewerage services, and the legally necessary inspectorate, might well be what people really want of the local authorities - ask the citizens of Waitaki Mouth, or Middlemarch - and perhaps in these straitened times it is appropriate that there should be yet another public debate about the proper function of local government.

Surely, too, there is not much point in holding referendums in conjunction with local body elections to give ratepayers more control and more say over spiralling costs, as Mr Hide has suggested, without first stopping central government from inflicting without consultation yet more costs on local government.

It is manifest that local taxes cannot continue to expand ahead of inflation in the way they have nationally during the past decade, too often on frills and superfluities, without urgent attention to how local governance is to be paid for; but if a debate is to be held let it be about facts, rather than fancies.

Householder rates are but one part of the income equation: the Dunedin City Council, for example, gets just over 50% of its income from rates.

The focus of debate needs to be twofold: on the means councils use to raise funds, and on the necessity for spending priorities to always be led by the provision of cost-efficient services.

 

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