12 December 2005

Councils Must Cut Spending.

Central Government Should Fund Local Councils From General Taxation.

Leaders of the Ratepayers Rebellion met last week to discuss the implications of substantial council rates increases forecast for the next ten years.

Auckland City ratepayers have every reason to be alarmed at possible 200% rate increases over the next decade. North Shore City ratepayers have already been warned of similar sized increases and other councils will follow suit as they release their 10-year spending plans.

These rate increases are unsustainable - especially as there is a growing number of ratepayers moving into the superannuation bracket of income Rates are a tax - a form of wealth tax based, for the most part, on the estimated value of the family home.

Rates take no cognisance of income or ability to pay. Nor do they accurately reflect the value of services supplied to individual households.

A Government-appointed 'task force' of bureaucrats is supposedly working on finding alternative funding sources.

Judging from an earlier Treasury report the work being done by the task force is in fact to find additional funding sources. Such an approach can only result in councils actually increasing their spending - rather than undertaking a fundamental appraisal of what local councils should and should not do and who should pay for it.

This is a time for urgent by both central and local; government to provide relief for ratepayers who may otherwise find themselves forced out of their homes by high and unsustainable rates increases. Alternatives to rates must be found - including central government funding out of general taxation. With central Government amassing huge surpluses from taxation the time is right to make this move. ends

ENDS

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