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The nationwide campaign to replace the present system of council rates with a fairer system which reflects ability to pay and value for money.

MEDIA RELEASE

29th November 2012

New legislation will give Government power to intervene to give ratepayers some protection from council actions and expenditure.

Next step must be to develop alternatives to rates.

The passing of the Local Government Act Amendment Bill is one more step on the road to bringing fiscal responsibility to councils and some measure of protection for ratepayers from ever-rising rates.

By introducing greater powers for intervention the Government is giving clear notice to councils that they will be under surveillance in terms of the funding methods they propose and the effect on rates and debt levels.

Opposition to the Bill has largely come from local councils who are concerned that they will lose some of their present unfettered powers to spend rates money as they see fit, without sufficient regards to the views of ratepayers.

Despite claims to the contrary local councils, will still be able to make decisions on spending for activities which are supported by their local communities.

The new legislation requires councils to concentrate on local core infrastructure, but still allows councils to define that infrastructure, which will vary from council to council.

The main aim of the fiscal responsibility measures in the legislation is to bring order and a measure of control on the level of rates and debt.

While much of council debt is related to infrastructure the need for, and quality of, some infrastructure is often questionable.

The new wastewater scheme at Mangawhai in Kaipara District , the new Stadium in Dunedin, and now the Central Rail Link in Auckland, are all examples of poor financial planning and management.

Some non-financial issues in the new legislation have raised concerns that the Government is stripping ratepayers and residents of their democratic rights, and there may well be grounds for some of those concerns.

But local councils have become so far offside with their citizens, particularly in regard to rates, that drastic action was needed.

It is now up to councils to adjust to the new legislation and make every effort to work with their ratepayers instead of constantly putting their backs up with rates increases way beyond the rate of inflation – and without the full support of their ratepayers.

The government and councils should now work together to develop new methods of funding local governments to replace the present unfair system of property rates which takes no account of the individual ratepayer’s ability to pay.

ENDS

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