Baldock Larry: Questions for Oral Answer — Questions to Ministers 
Baldock Larry: Questions for Oral Answer — Questions to Ministers 
[Volume:619;Page:14803] 
9.  
LARRY BALDOCK (United Future) 
 to the  
Minister of Local Government 
: Has he undertaken to review local government funding; if so what progress has been made on the review to date? 
Hon CHRIS CARTER (Minister of Local Government) 
: 
 Yes I have. The central and local government forum in December 2003 agreed that officials from both sectors gather accurate data on rating levels and research the extent to which there may be an affordability problem. The research will consider the degree to which any identified pressures are likely to be resolved by recent changes to council funding powers and examine appropriate solutions where gaps are identified. Officials from both central and local government are continuing to gather information to ensure that robust analysis can be undertaken. It is intended that officials report progress in October. 
Larry Baldock 
: Will this Government investigation include the possibility of increasing rates rebate levels to assist those on fixed incomes who may be asset-rich but cash-poor and who therefore have difficulty keeping up with rate increases? 
Hon CHRIS CARTER 
: The rates rebates scheme is something that the Government is reviewing. 
David Parker 
: How is the Government assisting local authorities with the funding of key infrastructure? 
Hon CHRIS CARTER 
: The Government appreciates that infrastructure is a major cost on most councils and their ratepayers and is providing some targeted assistance in this area. An example of that assistance is the Sanitary Works Subsidy Scheme which will provide funding of $150 million over the next 10 years to help small communities establish satisfactory sanitary works. 
Hon Dr Nick Smith 
: What greater sign of failure does he need of the Government’s new Local Government (Rating) Act and Local Government Act 2002 than the 10.4 percent increase in rates as identified by Statistics New Zealand during the first full year of this Government’s new legislation which is four times the rate of inflation and the highest increase in over 10 years; and why when the ink is hardly dry on those two Acts is the Government embarking on a review? 
Hon CHRIS CARTER 
: I remind the member that local authorities are responsible for setting their rates—and indeed are accountable to their communities for them—and that this of course is local body election year. 
Hon Dr Nick Smith 
: I raise a point of order Mr Speaker. As my colleague rightly says the Minister may as well have answered my question with “You can fly to the moon.” There was no attempt at all to address the question which was specifically about the issue of why the Government is having a review of two new Acts of Parliament that it has only recently passed. 
Mr SPEAKER 
: In so far as the question related to the issue about why the Minister is undertaking a review he will answer that part of the question. 
Hon CHRIS CARTER 
: I would be delighted to answer that aspect of the question. It is a very good example of the continuing dialogue between central and local government—something that never occurred before this Government came to power. 
Jim Peters 
: Has the Minister indicated a desire to interfere in the funding of local councils with regard to their democratic right to organise community boards and committees; if so why? 
Hon CHRIS CARTER 
: I certainly have no intention of interfering in the democratic rights of local councils. 
Larry Baldock 
: Is the Minister concerned about the increasing number of accusations—such as that just made by a member before—about the extra compliance costs that the Local Government Act 2002 has imposed on local authorities; and will he therefore request the Local Government Commission assisted by the Audit Office to analyse the claims and report back before July next year which they have the opportunity to do because of United Future’s amendment to the Local Government Act 2002? 
Hon CHRIS CARTER 
: I thank the member for reminding us that there will be a review of the Local Government Act. It will be on two particular things: one on cost blowouts if there are any; and two on whether genuine participatory democracy is occurring. I am looking forward to that review. 
Larry Baldock 
: Can the Minister confirm reports that financial assistance from central government was offered to local authorities as a substitute for the removal of GST from rates which is a tax on a tax; if so will the Government be prepared to keep the promise made when GST was first introduced by a previous Government that all tax raised from GST on rates would be diverted back to councils? 
Hon CHRIS CARTER 
: I cannot confirm that. What I can confirm is that local government in the history of New Zealand has never received as much assistance as it has from this Government. 
Larry Baldock 
: Can the Minister confirm whether the Government has recently had discussions with Local Government New Zealand regarding another of United Future’s proposals which is to investigate the distribution of a small percentage of general GST revenue to local authorities on a regional basis in the same way as the additional 5c on fuel excise tax is to be distributed? 
Hon CHRIS CARTER 
: No I cannot confirm that.