Nobody welcomes — and some people simply cannot afford — increases in rates.
In setting rates, elected members feel the crushing weight on the one hand of that public will, and the need to preserve community services and infrastructure maintenance on the other.
Borrowing to cover our cash operating costs is, in my view, the start of a death spiral to going broke. So that’s out.
Meanwhile, efficiency improvements within council itself are essential. The council’s chief executive has very challenging targets to meet in that respect, and these have already been built in to future budgets.
What is left, then, is whether basic services should be cut. By that, I mean making choices like how often bins should be picked up, what we spend on road maintenance, how often grass is cut within our green spaces, opening hours for facilities like the pool and libraries, and so on.
It’s a real challenge to weigh the pros and cons of the options, but in the end council decided we would not cut services other than in very limited ways (for example, reducing the opening hours of the Wachner Pl toilets).
Of course, no new capital projects will be started other than what absolutely must be done – which is nearly all infrastructure work. The cancellation of the Wachner Pl clock tower refurbishment was a reflection of that mood.
Even so, our council has set an average rate increase of 7.03%. Lower than all of our neighbouring councils, but still too high.
What then, when cost pressures and affordability issues are going to continue into the future, for Invercargill and all other councils in the country? This is a very complex issue — one that will not be solved by any single initiative — but I do believe that local government amalgamation is an essential step.
The inefficiencies inherent in having four councils in Southland are surely obvious to all, and in fact the consultation carried out by the Local Government Commission earlier this year found that two thirds of respondents agreed.
Reorganisation is not only desired by the public. It is inevitable.
The tougher question is what might amalgamation look like? In my view, we need to be bold and choose what offers the greatest prospect for efficiency gains by leveraging scale. To me, that is a One Southland model.
That will not be a full solution to the issue of ongoing rates growth, and there will be costs incurred in transition, but it will help our communities significantly over time.
Tom Campbell, Invercargill Mayor
