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John Palino - Rates Policy


JOHN PALINO

Rates and Council Efficiency

Rates are the Auckland Council’s tax mechanism. Every resident pays rent to Council, whether directly as a property owner or indirectly through rent. This money is used to fund transport, parks, governance and other Council services. However, rates are not the only income of Council. Indeed, over the coming year they will comprise a little under half of total revenue, with various fees, Government subsidies and other revenue streams responsible for the remainder. But because rates are a legally enforceable tax set each year that can be raised or lowered according to the discretion of the Council, they are the most reliable and the most accessible of all revenue streams.

The ease with which the Council can levy rates and require payment leaves ratepayers vulnerable to increases. The proposed rates rise is still more than three times the current Consumer Price Index annual inflation of 0.9% as measured by Statistics New Zealand. The amalgamation of the old eight Auckland Councils presented an opportunity to the new Auckland Council to leverage its size to improve financial oversight and hold rates at a level reflective of the Auckland economy. Instead, rates have increased every year well beyond the level of inflation and over the coming year have been set at four times the official inflation rate.

These increases hit everyone. They hit workers, many of whom are unable to negotiate higher wages in the current low-growth environment. They hit employers, making it difficult to hire new staff and pay better salaries. They hit business, increasing the cost of production and reducing the competitiveness of our industries. Moreover, they are especially hard on fixed income earners such as super annuitants.

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For rates to be brought back to a sustainable level, Council must spend wisely. But this has proved difficult over the first three years. Over the coming year, Council operational spending is projected to increase by over 4.5 per cent, due significantly to expanding bureaucracy which now costs Auckland more than the previous eight councils combined. Given public concern over the rising cost of living, the Council has chosen to hold this year’s rates increase at 2.9 per cent, below the 4.5 per cent necessary to match spending. Because other income streams have not expanded, the Council is now borrowing to offset rates, a practice that will impact ratepayers in later years.

The Auckland Council is no different from households or businesses when it comes to income and expenditure. Priorities must be identified and sacrifices made to avoid financial disaster. Nobody wants to spend less, but we all know we have to if we want to avoid the harm that comes with economic mismanagement. The Council must start making tough decisions about its priorities or we are all going to suffer. There must be a strong commitment from our elected representatives to keep Council spending in line with households and businesses. The Council must recognise that it plays a role in a bigger system, and that the Council is not the system itself.

MAYOR

Under a John Palino-led Auckland Council, general rates will not rise above inflation.

Focusing Council Activities

All public agencies in a democratic country like New Zealand suffer a loss of focus over time as necessary, but inherently cumbersome, official procedures expand in response to perceived public demand. The problem, however, is that, unlike a business where less profitable activities can be easily identified and cut back, activities in the public service are generally difficult to quantify or measure. So rather than prioritising important activities, public agencies tend simply to expand, taking on new responsibilities, often with no clear picture of whether residents are receiving best value services.

A loss of focus has been characteristic of not just the Auckland Council but local authorities across New Zealand over the past decade. Councils have moved into community, central government and commercial areas of responsibility, but have lacked the implementation tools to effect change. Staff, committees and other back office support consequently expanded to meet unclear objectives, each time passing the cost onto ratepayers.

The still new Auckland Council must turn this around. It must start to prioritise those essential activities local government is designed to do. This role is set out in legislation through a brief, but simple purpose statement. It says:

The purpose of local government is—

(a) to enable democratic local decision-making and action by, and on behalf of, communities; and

(b) to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.

I want to focus the Auckland Council on these three basic things: enabling local decision-making, providing infrastructure and community services; and performing regulatory duties. And I want there to be a genuine commitment to doing this in a way that delivers the best value for Auckland residents. I believe that if the Council does its job, it will set an example for others and ensure we have the right platform in place to build a great city.

Action

I will initiate and personally oversee a review of all Council activity and expenditure. As a top priority of my mayoralty, I’m going to win Council support for an intensified focus on Council infrastructure, community and regulatory services and allocate resources to these functions.

I’m going to apply a sinking lid employment policy across Council. This approach reduced staff numbers in Brisbane by 11 per cent in 18 months without a single forced redundancy and it can work here. By gradually merging qualified staff from activities outside infrastructure, community and regulatory services into teams focused on these areas, the Council will reduce overheads without compromising essential services.

I’m going to work with Council to streamline internal decision-making and review all committees and committee processes. When decisions are reached by the Council, they must be implemented and not repeatedly litigated again by other committees, sub-committees and other leadership groups. Ensuring that as few governance groups as possible make decisions and implement them will improve accountability as well as deliver efficiency, improving the quality of public services.

Leading from the Bottom Up

To really maximise the efficiency of decision-making and deliver best value to residents, local decision making is going to have to be transferred back to local communities wherever possible. They are the best judges of whether a footpath needs renewal or a tree needs trimming. By transferring local decisions back to those residents most affected, we can reduce the need for centralised bureaucracy and speed up decisions. Local responsibility for local outcomes is a win-win for residents and the region.

Action

I don’t want local decisions made in downtown Auckland. I want them made in the suburbs and townships of Auckland where they will be implemented by those communities affected. I am going to draw on the expertise of local business and resident associations and leverage the hours of work volunteers and other community representatives donate to their areas of interest. This will require a lift in funding for local boards who will oversee greatly increased local decision-making. These resources will be reallocated from centralised decision-making processes, which the Council will streamline to focus on regional infrastructure and regulation.

Transparency and Accountability

Transparency and accountability are critical to streamlining decision making and reducing excessive spending. If democratic processes are too complex for the public to be able to understand, then the processes are not only failing a basic democratic test, there is no way of knowing whether they are being performed efficiently. If the public does not know who is responsible for an activity or a service, then there is not only no accountability when things go wrong, there are too many decision makers duplicating processes.

Increasing complexity and declining responsibility are features of Auckland Council: how many residents understand what the Unitary Plan is, let alone what the process is and where it is at currently? Who is responsible for the failure to deliver an integrated ticketing system? Council processes and lines of accountability are now so complex that they are compromising basic democratic values and reducing Council efficiency. We must improve transparency and accountability if we are to match households and businesses and keep spending under control.

Action

I am going to work with officials to simplify Council decision-making processes and improve the way information is communicated publicly. I want there to be constant monitoring of staff numbers and wages, of committees and support, and of all the activities undertaken by the Council. This information will be presented on the website and in official documentation. These documents themselves, including the Long Term Plan and annual plans and reports, which are often 3-4 volumes and hundreds of pages in length, will be focused on those details the public needs to know. I am going to make it easier to find out what the Council is doing and why.

I will also initiate a review of Council responsibilities. As Mayor, I will take responsibility and become accountable for delivering on the overall performance of the city’s infrastructure, community and regulatory services. I expect, and am confident the Council will agree, that elected representatives will take responsibility for their local areas. Together with the Council, I will ensure that those public officials performing technical and operational functions will be equally accountable for their areas of responsibility.

ENDS

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