11 June 2012
David Thornton: New legislation will control spendthrift councils
Most ratepayers will welcome proposed changes to Local Government in the Local Government Act 2002 Amendment Bill which
will have its First Reading in Parliament this week.
The key changes will be new measures aimed at bring councils spending, borrowing and rates increases under permanent
scrutiny at Ministry level.
After years of complaint from all sections of the rate-paying community it appears that a framework will be put in place
which will allow the Minister to intervene in the affairs of any council which appears to be heading for financial
problems.
The framework is built around a set of financial prudence requirements in respect of income, expenditure and prudent
debt levels.
These requirements will be set in place by way of regulation, and will allow central government to intervene rapidly in
various ways where councils exceed the regulated prudent levels.
There will be plenty of politicians, local and national, who will oppose this legislation on the grounds that it takes
away local democracy.
But the vast majority of ratepayers will welcome the introduction of any proposals which will protect them from those
high spending councils which have no regard the views of residents, and look upon rates as a limitless supply of money.
Councils only exist through the will of Parliament, and the power of councils to set and collect rates was granted, and
is regulated, through various Acts of Parliament.
Ratepayers around the country have shouted long and loud against high rate increases and at long last it looks as though
their voices have been heard.
All parties in Parliament should support the introduction of fiscal responsibility in this new legislation.
ENDS