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Minister rejects many Rate Inquiry recommendations

Media release 31 July 2008

Local Government Minister rejects many Rates Inquiry recommendations.

Local Government Minister, Nanaia Mahuta, has advised me that the Government has rejected several key recommendations of the Rates Inquiry which reported almost exactly one year ago.

In a letter to me the Minister advised that there will be no implementation of the Rates Inquiry recommendations that the Government should establish three new sources of funding to relieve the pressure on council rates.

The Government will not be introducing an International Visitors Environmental Level – nor will it proceed with a recommended 2c per litre increase in the Local Authority Petroleum Tax.

The recommendation that an Infrastructure Equalisation Fund be established - funded by a share of GST – has been effectively shelved until after the general election.

The Minister also advised that the Government will not be implementing a recommendation that an independent unit be established to review council’s financial.

This decision comes at the same time that the Auditor-General has blasted the financial reporting by councils which currently fail to adequately explain to ratepayers how their money is being spent.

In a letter to mayors the Minister also revealed that decisions were due for release in July on several other key recommendations which, if implemented, would also relieve the burden on ratepayers –particularly residential ratepayers.

These recommendations include the general use of volumetric charging for wastewater, removing rating differentials and the uniform annual general charge, and removing exemptions from rates for Crown-owned property.

The Minister also advised that the Rates Rebate scheme would not, ‘at this time’ be extended to include retirement village residents.

In sum total, a year after the report was presented to Government, ratepayers will see very little relief from the Rates Inquiry recommendations.

This is a very disappointing result, especially for those on low and fixed incomes.

The Government’s decision not to establish an independent watchdog to review councils’ financial decisions is a major disappointment for all ratepayers.

Such a unit would have been an immediate avenue for ratepayers to challenge spending decisions – an issue which has been a major cause of unrest among ratepayers for many years.

Ratepayers will see little value for the input they provided to the Rates Inquiry.


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