Folks, when you
open up this envelope or get your electronic version, I can tell you it’s going to hurt.
The sharp intake of breath that will follow, will then be joined by anger, as Kiwi homeowners realise their rate increases are on average more than five times above the current inflation rate.
What’s more, these rate increases will be inflationary in themselves and will continue to be so as double figure rate increases batter the country annually, over the coming years.
A dark cloud hangs over local government. Kiwis are about to feel the reality of that hit their wallets, if it hasn’t already impacted their level of service, be it infrastructure like roads and water, or community services that they have come to rely on and have gradually seen reduced or not improved. Most Kiwis will feel that we are paying more for less.
We have a funding problem, in that the traditional set-up of taxes on properties owned just doesn’t appear to be sustainable. The chickens are coming home to roost, and there doesn’t appear to be any solutions coming from the Government, other than, “it’s not our problem and you will have to pay, communities”.
That’s not to say I think the funding question is a problem for central government to solve by writing out a cheque, but it must be a willing partner at least.
Forcing its own version of water reform has ensured those costs and asset liabilities stay with councils for at least two years. Its promise of city and regional deals could be an opportunity to build a more collaborative relationship between our arms of government and fund some major needed infrastructure that helps to build a nation.
Currently central government doesn’t think local government is competent and local government doesn’t trust central government.
The erosion of trust has built as the former has continued to hand the latter unfunded mandates – that is cost and processes without associated dollars – over the decades.
Rates as the key funder of local government are not sustainable, particularly when councils are estimated to own about 36% of public infrastructure, but only have 10% of the revenue.
We know that our massive infrastructure deficit is primarily made up of money we have failed to spend on assets we have already built.
A rebalancing in the funding of local government is needed and new revenue sources and funding tools such as road pricing and congestion charging – plus ideas such as value uplift for land development – must all become available to local government.
Another notion that must be seriously considered to alleviate this funding deficit is some kind of direct local government income tax on all New Zealanders. Shouldn’t every taxpayer contribute to investment in their local communities?
The challenge is there for this National-led Government to reform local government.
This exists not only in the funding regime, but also a much wider improvement of the democratic instruments. All of us want to be confident that when we vote for our local councillor, we can have faith that they can take action to improve our community and stop something that isn’t working in our neighborhood, if need be.
Instead, we have three yearly public angst expressed after each council election, when turnout falls again, and we think it’s about postal voting versus booth voting.
When you look at the figures, turnout has been in decline since 1989 when local government was corporatised and real influence was handed to an un-elected chief executive, who holds the pen and controls the all the money and information in the council.
Voters are smart; they know that in many cases who they vote for, or even whether they vote, is almost irrelevant because chief executives get paid the big money and call the shots.
Local Government Minister Simeon Brown has to be praised for his calling out of Wellington City Council chief executive Barbara McKerrow for her apparent lack of interest in fully disclosing advice and information to her elected council.
Last time I checked those councillors own those documents on behalf of citizens, not the chief executive. However, we are living in an upside-down universe now where elected members are “othered” by council officers and many occupy a Stockholm syndrome trance where they feel they are beholden to chief executives.
We have not had serious reforms in local government since Michael Bassett was the Minister of Local Government.
As a small nation of just over five million people we currently have 699 local councillors, 558 community board members, 139 local board members, 127 regional councillors, 74 licensing trustees, and 66 mayors.
These numbers are simply not sustainable. We must consider some level of amalgamation. The minister must make the call; we cannot leave this up to locals to decide, as they will always protect their primary patch.
Local democracy doesn’t have to suffer, but the system and the decisions will be more efficient with fewer people.
The problem with both these interlinked funding and democracy challenges is that the National Party doesn’t see itself as reformist.
My contention is that they will be forced into action sooner rather than later as their traditional grey-haired support base reacts in outrage at their new rates bills – due shortly.
Those on fixed incomes are going to hurt and it will simply be unaffordable for some people to stay in their homes – old and young, rich and poor.
A retirement village with a low capital entry requirement of $500,000.00 and fixed weekly costs for the rest of my life has never looked so appealing to this Aucklander. Even if it’s in Levin!
