Editorial: McIntosh's debt reduction proposal will spark backlash

Councillor Gail McIntosh.

Tauranga councillor Gail McIntosh's stance on a proposed rates hike is intriguing.

Her statement that a basic rate rise alone was not enough and an additional charge was needed to tackle the city's debt level was provocative.

It appeared to call the bluff of ratepayers critical of the council's financial position.

It is likely to spark a backlash from residents alarmed by the possibility of such a big increase in rates.

This is understandable as such a demand would have a big impact on a family's weekly budget.

It is a fair bet Ms McIntosh was aware her proposal would attract a strong reaction.

The boldness of her statement is highlighted by the fact many of her colleagues are lobbying for a 2 per cent increase.

In contrast, she would like to see a direct debt reduction rate that would see the city's almost $400 million debt divided over 40 years and paid off $10 million a year by the 51,00 ratepayers.

She says it is time for the council to show it is serious about debt reduction and for the community to get its head around paying for it. The additional charge would add up to $3.77 a week for each household, roughly the cost of a cup of coffee, Ms McIntosh points out.

The analogy will do little to appease ratepayer concerns.

The city's debt is considered to be the main reason for the departure of a large number of councillors at last year's election.

Seven councillors were dumped and the mayor hung on by his fingernails in what was possibly the biggest single rout in council elections for 30 years.

Many of those who took the place of the ousted councillors campaigned on a platform of improving the city's finances, Ms McIntosh among them.

Lately, we have been hearing a lot about reducing council spending to balance the council's books.

It has already been suggested levels of service may be trimmed to save money and to stave off a big rates increase.

This could affect things such as the frequency of lawn mowing, and park and reserve upkeep.

I do not think cutting services was a solution in itself. The debt level is such that tough decisions need to be made.

It appears Ms McIntosh is prepared to make these decisions. It is a good reminder to her colleagues that they need to live up to the statements they made at the election - even if it makes them unpopular.

I don't agree with her plan because, in my view, it does not spread the burden fairly. Even 40 years is a short period of time.

City councils often see loans as the fairest way to pay for big-ticket projects, such as a community pool, because it spreads the financial burden over several generations.

This is important because it means future generations who get to use the facility also play a part in paying for it.

Even though I don't support the plan, I believe Ms McIntosh deserves credit for having the courage to put forward a proposal that, in all likelihood, she knew would be unpopular, and for having the courage of her convictions.