Carter Chris: Local Government (Rating Cap) Amendment Bill — First Reading 
Carter Chris: Local Government (Rating Cap) Amendment Bill — First Reading 
[Volume:617;Page:12683] 
Hon CHRIS CARTER (Minister of Local Government) 
: 
 This bill is a political stunt and a deceit. It purports to help ratepayers by placing a cap on the amount by which a local authority can raise its rates both in any 1-year and in any 3-year period. As Minister of Local Government I can say clearly that this bill will do nothing to help ratepayers. It ignores the fact that we have local democracies in this country—elected by ratepayers—to make local decisions about how to deal with local priorities and how to fund them. Local Government New Zealand does not support this bill and I am not surprised. 
This bill is an instrument of central control; rather strange from the ACT party does one not think? It is an example of ACT decreeing what is good for local communities instead of letting the people who live in those communities decide for themselves. It would mean that if a local community wants its council to do something that would require the raising of rates beyond inflation the council cannot do it if the community paying the rates does not want it. Mr Hide knows best—that is what this bill is all about. 
It does not come as a surprise to anyone to learn that Mr Hide does not know what is best at all. His bill is prefaced on the idea that there are no compelling financial reasons driving local rate rises larger than inflation—just the frivolous whims of councils and local people. Obviously ACT has not spent any time at all talking to New Zealand’s local authorities. There may be some poor decisions made by some local authorities around the country but across the board there are also real financial problems facing councils after a decade of failed free-market policies. Councils are struggling to meet the huge cost of upgrading vital community infrastructure such as sewers and water pipes because of the deferred maintenance that occurred in the 1990s under the pretence of greater efficiency. That has been a key driver in rate increases in recent years and this bill completely ignores it. 
The bill will significantly restrict the ability of councils to meet infrastructure costs. Improvements to roading sewerage and water systems will be nobbled. Communities will have to continue to endure health and economic problems that run down infrastructure courses and so will the taxpayer. After all it is the taxpayer who ultimately picks up the tab for hospital bills and lost productivity. Because of the infrastructure imperatives that are driving rates if this bill were to become law councils would have little choice but to attempt to find other ways of raising money to try to meet those imperatives. Those attempts could have unforeseen consequences. This bill is a stunt because the very thing it seeks to stop—significant rate rises for ratepayers—it cannot prevent. An individual’s rates might rise massively even though his or her council has not increased rates overall beyond the parameters set by this bill. That is because the bill does not account for a movement in property values or a shift in the incidence of rating from one sector to another. 
The bill implies that its authors are conversant with the new local government legislation and its application. It is quite evident that they are not. The Local Government (Rating) Act passed by this Government seeks to give councils more flexibility on how they rate in order to more fairly spread the rates burden. That Act and the Local Government Act 2002 seek to provide communities with more transparent and understandable information about rating decisions. These days a council must front up to its community with clear and compelling reasons for rate rises. The community has greater opportunity than ever before to influence a council’s spending priorities. Councillors are explicitly required to take into account the necessity for rate rises any reasonable steps that should be taken to mitigate an increase and the level of community support for it in their decision-making processes. The supreme irony of this bill is that it effectively repeats those requirements in its dispensation provisions. Apparently its architects were ignorant of the fact that such requirements are already in legislation. 
As a final comment let me say that while this bill is totalitarian—and that should hardly be surprising I suppose considering whom it has come from—Rodney Hide’s underlying concern for efficiency in local government is commendable. I suggest that he redirect his efforts toward working with councils to improve efficiencies rather than against them. We have a lot of councils in New Zealand—86 in total. If we are to maintain the number we have—and ultimately that is down to communities to decide—then we must ensure that those 86 councils work together in the most prudent ways possible. There is immense scope under the Local Government Act for councils to save their ratepayers money by jointly providing services and sharing costs. We do not have to issue parliamentary decrees to achieve that. We can provide evidence and information about the savings that can be made and convince councils and local people with persuasive arguments. 
The Labour Party will not support this bill.