Productivity Commission Recommends Milking Ratepayers More
If the Productivity Commission's report on local government funding, released yesterday, had been relied on by NASA as the basis for getting astronauts to the moon, its greatest achievement by now would have been launching a $2 skyrocket 40 feet into the air on Guy Fawkes night.
The innovation that turned hole-in-the-dial telephones into portable computers called iphones is conspicuous by its absence.
The report’s highlight appears to be numerous repetitions of worn out platitudes about debt being “an effective and appropriate way for councils to spread the burden of capital expenditure across generations”.
The report's major recommendations are a series of additional ways for councils to extract more money out of the pockets of already overburdened ratepayers and taxpayers.
Such methods as wider use of extra petrol taxes, extra targeted rates, more user charges, taxing empty sections, and road congestion charges are all gleefully suggested.
It even recommends a sleight-of-hand way that councils can borrow money using fancy financial instruments called Special Purpose Vehicles so that the borrowing won't appear on council balance sheets but ratepayers will still be lumped with the interest and debt payments.
Those debt and interest payments will further enrich the profits of the country's already bloated overseas owned banks and rich institutional and corporate investors.
Ratepayers already pay nearly $1 billion in interest currently on local authority borrowing that has increased 600 per cent, from $2.7 billion to $16.2 billion, in just 18 years.
Yet there was no mention of the possibility that councils could borrow direct from the country's Reserve Bank at zero or near zero interest rates and save ratepayers billions every year in current and future interest payments.
Nor was there any mention of the possibility that the government could directly fund council water, waste water, and other infrastructure from the same source – something recommended by an International Monetary Fund report of 2012.
The Productivity Commission's 360 page report cost taxpayers over $1 million - money that would have been better spent on feeding those standing in line at community foodbanks, than on another weighty doorstop.