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Homeowners Should Not Pay To Bail Out A Rugby Club

15 March 2012

Statement from David Thornton

Major Loop-Hole In Local Government Act Must Be Removed

There can be no possible justification for homeowners being forced to meet the cost of rescuing a rugby club [or a ‘province’] from bankruptcy – but that is what Dunedin City Council has just approved without any reference to ratepayers.

Those who support the financial bail-out will claim that the forgiving of almost half a million dollars of debt is justified by Section 10 of the Local Government Act 2002 which states the purpose of local government is “to promote the social, economic, environmental, and cultural well-being of communities, in the present and for the future.”

This is the provision which councils around the country rely on to get involved in financial ventures for which the ultimate guarantors are the ratepayers – most of whom are homeowners who face losing their homes if they do not pay demands made on them by their local and regional councils.

The Government must move with urgency to close this wide-open door through which councils drive their Rolls-Royce proposals for projects supposedly bringing economic benefit to the community based on assumptions which too often prove unrealistic.

Dunedin Stadium is a typical case of councils being seduced by untested economic forecasts, and when those forecasts prove wildly inaccurate it is the ratepayer who meets the cost.



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