Increasing council rates, when everybody is feeling pressure on the family purse from every direction, is understandably unpopular.
It is not difficult for any ratepayer to find council spending they do not approve of or which they see as frivolous or nice-to-have.
But this move flies in the face of the support for localism Prime Minister Christopher Luxon professed in the lead-up to the last election.
Indeed, if such a cap had been proposed by Labour at that time he would likely have bellowed about nanny state or Big Brother.
Now, it seems, although Mr Luxon told us repeatedly at the cap announcement this week, that many of the country’s new mayors and councillors had campaigned on keeping rates low, he cannot trust them to sort out their own affairs.
Somehow, they need central government to come in on a white charger to support their rates’ ambition, "and help protect local government’s social licence for the long term".
Really?
The transition to the new system is not expected to begin until 2027 with the cap fully in force in 2029.
Since we will have had both a general election and another round of local body elections by then, it is hard to see this move as anything more than performative and a distraction from the government’s failure to convince people it is making them better off.
We expect the National Party will go into next year’s election with billboards proclaiming it is keeping rates down when nothing much will have happened.
The plan is to limit rates rises to within 2 to 4% per capita a year. Local Government Minister Simon Watts said the 2% aligned with the midpoint for inflation, and 4% reflects long-term economic growth.
Only four of the country’s 78 councils are expected to have increases below 4% this financial year.
It is simplistic to think a central government imposed rates cap will be the answer to cash-strapped ratepayers’ prayers.
If councils cannot keep rates within the cap amount they will be faced with options many ratepayers may also find unpalatable, raising charges for a variety of services, including water, dog registration, cremation and burials, parking, and use of council facilities such as swimming pools.
Cutting back spending on parks, sports grounds, museums, libraries and art galleries, all things which add to the vibrancy and pleasantness of communities, both for residents and visitors, is another possibility.
There is also the risk there will be more skimping on maintenance of infrastructure, something which always results in higher costs in the long term.
There will be the opportunity to go above the cap, with the permission of a government appointed regulator, but Mr Watts said this would be rare.
It is ironic the government which has made such a noise about getting rid of bureaucracy and red tape is setting up another regulator.
It is not clear how much sympathy the government will have for councils facing increased costs as a result of increasingly common climate change-related weather events. Mr Luxon said it would depend on the event and how much damage was caused.
It seems cumbersome to require councils who might need to raise revenue to pay for things outside of extreme circumstances, such as catching up on past underinvestment in infrastructure, to apply to the regulator for approval.
Mr Watts said in those circumstances councils would need to provide justification and explain how they would return to the target range over time.
Despite the long lead-in to the policy’s implementation, the government is not conducting a full public consultation, but a targeted one with unidentified stakeholders between now and February,
Asked why change could not be done faster, Mr Watts said "reform done fast and without care costs ratepayers more than reform done properly. This is significant reform, it’s complex, and you know, we’re taking our time".
All the more reason for allowing all points of view and possible funding alternatives to be explored and fully considered.
