Donnelly Brian: Local Government (Rating Cap) Amendment Bill — First Reading 
Donnelly Brian: Local Government (Rating Cap) Amendment Bill — First Reading 
[Volume:632;Page:4475] 
Hon BRIAN DONNELLY (NZ First) 
: 
 The previous speaker got one thing right and one thing wrong. The thing he got wrong was that New Zealand First is part of this Government. I tell him that I am not part of this Government. But everything else he said was correct and we support him. We would support this bill going to a select committee if in fact it allowed debate on the issue of rates. It does not do that and that is the problem. 
New Zealand First has for some time been concerned about local body rates and those concerns were reflected in its manifesto for the 2005 election. I will read out some of those policies: “New Zealand First will … explore options to reduce the rates encumbrance on seniors with a fixed income; … review the legislative burden that central government has placed on local government”—as the previous speaker talked about—“and the impact of this on ratepayers …;” and “reduce the layers of bureaucracy which have increasingly been superimposed onto local government”. Those are just some of the very significant issues around local body charges. 
I happen to live in a place called Ngunguru on the beautiful east coast of Northland. Until the last couple of decades Ngunguru was basically a seaside holiday spot joined to Whangarei by a dusty winding road. Most of the dwellings were humble baches; some still are. But in the last quarter of a century the place has been transformed. Property values have risen sharply and people who had modest homes are now asset millionaires. The trouble is that those same people are often reliant solely on superannuation. Rates are crippling many of those people and as Rodney Hide explained many of them are being driven to have to sell their homes. 
The question is does this bill address that problem? The answer is no it does not address it. This bill limits the total level of rates not the individual level. So if one part of a council’s region has value increases and another has decreases then an individual’s rates could climb far higher than the limits set in this bill. Moreover if a council’s area has significant growth—say by 10 percent more properties over 3 years; and we think in terms of the growth in places like Tauranga—then it will not have the capacity to raise revenue for the additional costs because it is limited down to the increase in the consumer price index plus 4 percent over the 3 years. 
The second issue is Government-imposed costs. Will this bill rectify what our local regional council chairperson has referred to as incremental cost creep? The answer is no the bill will not rectify it—very simply because of what Rodney Hide has already admitted. The bill allows for the Minister of Local Government to provide dispensation to go above the limits imposed by this sorry piece of legislation. Are we to believe that central government having imposed additional costs on local government will refuse dispensation to councils that ask it to accommodate those imposed costs? Of course not! Councils would push increases to the level that is allowed in this bill add central government costs on top of that and then go to the Minister and ask for a dispensation. That is exactly what has happened in New South Wales. I want to make the point that much of the additional bureaucracy within local government stems from the need to comply with central government directions. So every additional bureaucrat will be factored in as arising from central government’s compliance impositions and will be added to the case for dispensation. 
There is another important consideration. What happens when a local body seriously under-invests in infrastructural development over a considerable period of time? When that body is finally forced by circumstances to face reality—presumably with newly elected members elected by people who have themselves seen there is a shortfall—then even if those people ask for increased expenditure on neglected infrastructure the council will not be able to do it. The bill is nonsensical and those who believe that sending it through to a select committee will enable an in-depth public analysis of the whole issue of local body charges are fooling themselves. Submissions will be confined to the very restricted concepts of the bill. 
New Zealand First is calling for a well-resourced independent commission of inquiry of the magnitude of the McLeod commission of inquiry into taxation at central government level—and we will achieve it unlike this bill which will not be passed all the way through the House. Even if the bill passes its first reading tonight I will make a bet—and I will lay money on this—that at a later stage in its process National will vote against it because it knows that this bill is not workable in the real world. We believe that the only way the myriad of complexities surrounding the issue of rates will be unravelled in a truly independent fashion and the voice of the people will be allowed to be heard across the full range of issues—rather than playing silly political games that raise false hopes and have no possibility of satisfactory outcomes—will in fact be to have a fully fledged commission of inquiry into all the issues in terms of local body charges. Thank you Madam Assistant Speaker.