Capping Rates Makes Councils Budget Like Families
Rodney Hide Friday, 26 May 2006 Articles - Local Government
As the newly-elected MP for Epsom last year, I quickly gained a new appreciation for the problems people have with local
As well as high taxes from central government, local and regional councils squeeze families with a rates burden that
increases year after year. The climbing costs of local government are tough on working families, and tougher still for
That's why I am proposing a limit to increases in local body rates. My Local Government (Rating Cap) Bill that is before
Parliament would limit rate increases to the level of inflation plus 2% in any one year, or by inflation plus 4% over 3
Without these limits, Auckland's residential rates are set to rise 11.2% over the next two years. In the last three
years, Wellington City Council's rates take has increased by 20.5%, Christchurch City Council's by 19.4% and Hamilton
City Council's by 15.2%.
My Bill would force politicians to work within a budget, just like Kiwi families do.
Local body politicians would budget and prioritise, they couldn't just dip more deeply into ratepayers' pockets.
My Bill puts ratepayers back in control of local government by limiting the amount their councillors can take.
Some Councils already manage rates well. In Wellington, the Hutt City Council has a strategy to raise rates no more than
half a percent above inflation.
Of course, in exceptional circumstances, there may be a legitimate need for local government to take more funding than
the cap permits. My proposal allows the Minister of Local Government to permit increases above the cap if they are
satisfied that a project has public support.
But capping rates won't just require discipline from local government. Central government will also have to restrict the
things they expect councils to manage, monitor and maintain.
Councils are expected - even encouraged - to play an ever-increasing role in the lives of their ratepayers. Searching
the Government's website returns a list of 138 services that local government is expected to provide - a list including,
from July 1st, the expectation that councils will monitor compliance with Labour's controversial law to microchip dogs.
In fact, the "power of general competence", given to councils in 2002, allows local councillors to undertake any
activity they want in the name of ratepayers. Local government has grown like Topsy.
Councils are also left to pick up the messes where central government fails. Protecting citizens from thugs and thieves
is the first role of central government, but many councils have felt the need to put private security staff on patrol,
because police are stretched to breaking point.
Simply shifting the burden of bureaucracy from central to local government is unfair on councils and on ratepayers. My
rates cap Bill will stop central government using local councils as a dumping ground for tough problems.
Most importantly, people wouldn't have to dread the arrival of their council's rates demand. Pensioners wouldn't be
thrown out of their family homes because they can't afford the rates. First home buyers wouldn't have to factor in the
cost of councils when calculating their mortgage repayments. Families wouldn't have to go without, to fund council
services they don't use and don't want.
Capping rates would give Kiwis security that the cost of local government wasn't going to increase year on year.
Like any family, Councils would have to budget and prioritise. Central government would have to stop dumping tough
problems on local communities, and local politicians would become more accountable to the ratepayers who fund them.
The ACT party supports smaller, smarter government - from the Beehive to local Community Boards. Central and local
politicians are not our parents, and should not be our masters. To counter the ever expanding rage of activities
emanating from Wellington and Council Chambers, ratepayers and taxpayers need effective tools to keep politicians under
There are some tasks which can, and should, be administered by local and regional councils. These need to be separated
from the rorts, personal hobbyhorses and grand plans which eat up the time and money of local councils. Capping rates
would put an end to the abuse of ratepayers through endlessly increasing the financial burdens that both central and
local politicians place on them.
Better decisions are made by families around the kitchen table than by officials around their Cabinet and Council
tables. It's time that the financial discipline of the family is also applied to the central and local government
politicians who manage our public services.