Monday, June 18th, 2001

Sweeping new powers of local councils to stretch rates taxes - absentee owners disenfranchised

The local government reforms announced last week by the Prime Minister and Local Government Minister Sandra Lee would see property taxes or rates spent across many new areas, and the voting rights cancelled of bach and company property owners alike.

The Employers & Manufacturers Association (Northern) says suggestions like these in the Local Government Amendment Bill should make this year's local government election a humdinger.

"The discussion paper proposes that local councils should be given sweeping new powers even where they may have little or no experience," said Alasdair Thompson, EMA's chief executive. "Rates or property taxes would be spent in entirely new areas.

"The approach would transfer a lot of cost from central to local government.

"Nevertheless business can see there is considerable merit in widening some council powers, responsibilities and accountabilities.

"But we object strongly to the proposal that voting in local government elections be reserved solely for permanent inhabitants of an area, and that the number of councillors in each council be determined only by the permanent local population.

"This would cancel the voting rights of owners of commercial premises and those of absentee owners of holiday homes like baches and cribs.

"Commercial property owners of shops, offices, warehouses, and factories would lose their right to have a say over who sat on the council where they paid their property taxes - this is unconstitutional.

"It would also create tremendous anomalies. For instance over 55 per cent of rates in Auckland city are paid by absentee business owners who would be totally disenfranchised.

"Half of the Coromandel's ratepayers would find they had no say over the council spending their property taxes.

"However business agrees the present Local Government Act is too prescriptive. Widening local council powers could be an improvement if it meant councils became responsible for issues that currently fall between jurisdictions, like who is responsible for hauling a car wreck out of a hydro lake.

"The list of issues that councils select to take new responsibility over must be decided at a broader level than the present consultation process allows. There is compelling evidence many councils pay lip service only to the consultation loop. We suggest councils be required to hold referenda to establish electors' preferences over new areas of council responsibility.

"The worst outcome would be if councils began using ratepayers funds for tasks that are the role of central government, such as providing health, police, education and social welfare services, including subsidised housing.

"We want Government to explicitly ring fence issues of the sort as the sole prerogative of central government in such a small country as ours.

"A further proposal suggests that councils lose their ability to hold a mortgagee sale of property to collect unpaid arrears in rate payments. The cost would then fall on other rate payers.

"Rates must remain as a secured debt in the same way that unpaid PAYE and GST taxes to the IRD are. Then, like the supply of other ordinary goods and services, user charges for water, sewage and the like could be treated as unsecured debts."

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