No 1 bore at Kai Iwi is one of three drawing water from the huge Nukumaru aquifer. Photo / Bevan Conley
No 1 bore at Kai Iwi is one of three drawing water from the huge Nukumaru aquifer. Photo / Bevan Conley
Comment
I have never met anyone who enjoys paying rates. Federated Farmers President Katie Milne wrote an article in February (Chronicle, The Country) very critical of local government rates.
Federated Farmers had recently conducted a survey of its members in which her reported feedback demonstrated an obvious lack of understanding of the Local Government (Rating) Act 2002. Wider public comment on rates suggests that these misunderstandings are commonplace.
Prior to successfully standing for the Whanganui District Council, I was a vocal critic of our council's rate levels. I maintained that the rates had always been too high, annual rate increases had usually been excessive, and rating of rural properties was never based on fairness.
One forms a very different viewpoint when sitting in council chambers and obliged to consider all that councils are charged with doing and the means by which they can raise finance.
Milne points to a ten-year period (June 2007 to June 2017) where, nationwide, rates increased by almost 80 per cent compared with the CPI at about 23 per cent. Local governments answer these charges by saying "when considering local government inflation, it is well to bear in mind that councils don't buy Weetbix; they buy asphalt".
I am now buoyed by the fact that Whanganui District Council has acted prudently with respect to rates rises over the past decade.
This has been assisted by holding our roading costs, which is council's largest spending activity, to practically no ratepayer dollar increase in 10 years while maintaining or improving our assets and infrastructure levels of service. Furthermore, council has faced demands to provide new services and expanded regulatory functions.
Councils have few available tools to raise money. We can use fees and charges (e.g. dog registration or building consents) but these are limited to the cost of the specific service provided.
They cannot be used to raise general revenue. We can borrow, but our current debt level is already high and we prefer not to borrow to fund operational activity. We do not want the burden of loan repayment for this moved on to future generations. Thus, rates are the principal mechanism we possess to finance council's ongoing everyday activities.
Whanganui City Council Councillor Alan Taylor. Photo / Bevan Conley
Rates, legally speaking, are a "tax" and as such, are far less restricted. Rates are collected from all ratepayers but do not have to be spent proportionately to benefit precisely who pays them. To their credit, councils attempt to collect and spend rates fairly.
We councillors work with our council officers to develop funding models to best achieve this. Perfection is, however, impossible. For one thing, rates fund what we call "public good" and ratepayers do not utilise our public assets and services equally (for example, not everyone uses the libraries or sportsgrounds to the same extent).
The oft-heard criticism that "we get nothing for our rates" is, unfortunately, very wide of the mark.
I wonder how many of our critics consider council's involvement in their first actions of the day; flushing the toilet, using water to shower and make breakfast, and then walking, cycling, or driving to work on footpaths, cycleways and roads all of which are services and assets provided and maintained by council using rates?
These council provisions could usually be improved but only with even higher rates. I hate to think what ratepayers would be up for, let alone the resultant chaos, if the critics were to provide these things for themselves (just resealing a city street along a section frontage costs more than an average five-year rates bill).
Whanganui District Council is a $90 million business. It is lean and efficient and while not perfect, constantly strives to do better. It provides extremely good value for money. Under our financing restrictions, it will not provide for each according to their contribution. It never has done.
Every rating round councillors and council staff work, debate, consider and reconsider at great length the options we have to keep our rates as low as possible without permitting our services to slip and our assets to fail. The challenge is becoming ever more difficult under the antiquated and restricted financing option of property rating.
I trust that Milne and Federated Farmers have made their concerns known to our Wellington legislators as they seek better and more fair ways of allowing for the funding of New Zealand's local government operations.
Certainly, Mayor Hamish McDouall, myself and Whanganui District Council as a whole have. In the meantime, Whanganui ratepayers and citizens: we have your back.
