Ratepayers and businesses groaning under the weight of soaring yearly rate rises could find relief in a report presented to the Minister of Local Government, Rodney Hide today; the report calls on councils to focus on core services.
Rates increases for the current year have ranged from 3 percent to 26 percent, local government bureaucracy has grown by nearly 35 percent in the last five years and bureaucrats have had salary increases of 70 percent, says David Thornton, long time ‘NoMoreRates’ campaigner.
Some of the bureaucrats are writing reports for projects for which there is no funding available.
“What’s the point in spending millions of dollars on studying a new road system if you know at the end of the day you are not going to be able to build it because you won’t have the money?” Mr Thornton asked.
Rates have been increasing at double the rate of inflation since 1987, says Don Nicolson, chairman of the Local Government Forum, the result of councils’ investing in new ideas rather than funding existing projects.
The report, ‘Local Government and the Provision of Public Goods’, authored by the Forum, a consortium of business groups, has outlined which essential services or ’public goods’ could feasibly be provided by councils and which would be better served by private interests.
“A public good, for example street lighting or civil defence, is something that no-one else would provide because it can’t be ‘user-paid’. You couldn’t stop non-payers from using it, nor could you limit access to it to those who’ve paid,” Mr. Nicolson said.
“How I see it, local government is at a critical point. Funding is tight. We have heard many councils around the country saying that... they they are concerned about how they are going to continue their funding in the future.”
Associate Minister of Local Government, John Carter said last month that the expansion of council functions meant that councils had obligations as diverse as gambling, prostitution and dog control.
These new responsibilities had involved extra costs on councils and, therefore, on ratepayers.
“Hamilton City Council has identified at least 60 pieces of legislation ....that have imposed additional costs on ratepayers. Wanganui District Council has estimated these cost their ratepayers the equivalent of a 6 percent increase in rates per year.”
Mr. Thornton is convinced that local government reform is necessary as local body bureaucracy has expanded exponentially.
However, he maintains that the report ‘is largely an economist’s justification for the Forum policies of lower rates for businesses and no public spending on services and faculties that could be provided by the private sector.”
The proposals fully implemented would certainly make fundamental changes to the way in which councils would operate.
“For many years councils have provided facilities which contribute to the quality of life of their residents - most of which, under the Forum’s policies, would become partly or fully user-pays.
“Libraries, swimming pools, water supply, wastewater museums, public transport, indoor recreation facilities, sports grounds etc - to name but a few.
But some services would probably not exist if they were not user pays, Mr. Thornton said.
“Any suggestion of the privatisation of water supply and sewerage reticulation and disposal would certainly arouse substantial opposition.
“Overall the Forum report is a useful contribution to the debate on the future of Local Government - but Mr. Hide must also listen to the voices of residential and rural ratepayers who are the ones least able to meet the costs of wasteful and extravagant councils.
David Thornton was an advocate for last year’s Local Government Rates Enquiry which led to 96 recommendations for reining in local body spending and providing a more efficient and transparent service for ratepayers.
“I have been ringing local councils and there appears to have been no response to the recommendations,” Mr Thornton said.
