Carter John: Budget Debate 
Carter John: Budget Debate 
[Volume:647;Page:16410] 
JOHN CARTER (National—Northland) 
: 
 I want to focus on local government issues in this 10 minutes that I have. But first of all I make the point that here we are today debating the “block of cheese Budget”. The amount of $16 a week has not yet been given out but it will be given out just a few days before the next election. Of course this is the second time we have debated a promised tax cut. The last one of course was offered by the Labour Government before the last election and it was called the “chewing gum tax cut” as people may recall. But nothing happened. At least with this one because Mr Cullen could not trust himself or his Government they have put it into law and this tax cut will be implemented. So at least there is some certainty. The dilemma is of course that for most people a shift from chewing gum to a block of cheese a week or a fortnight really does not mean a lot to them. I suspect that the Labour Government is expecting a big bounce out of this but I think it might get a bounce downwards rather than a bounce upwards. We will wait and see. 
One of the disappointing aspects of this Budget was the lack of response in any significant manner to the worries and trials and tribulations of local government and more particularly their ratepayers. This House will recall that last year we discussed and debated a thing called a rates revolt. Many ratepayers were facing significant rate increases as a consequence of the costs that had been put upon them for a number of reasons partly because of the decisions taken by this Labour Government over the last 8 or 9 years. It has passed 69 pieces of legislation that have put costs on and shifted responsibility to local government but without giving any significant funding. 
The Government’s response to the rates revolt was to tell people not to panic because it would have an inquiry. That of course was forced on the Government because the National Party very nearly succeeded with the support of the Green Party in getting an inquiry going at the select committee. To head that off Labour promised the Green Party that it would have an inquiry so we could not get the support— 
Ron Mark 
: No it was New Zealand First. 
JOHN CARTER 
: Well the New Zealand First Party was not on the select committee. So with the Greens and National the select committee would have had the majority. But the Greens decided as did New Zealand First that they would go with an inquiry and that inquiry became the Shand report. The fault of the Shand report because of the limitations that were put on it by the Labour Government was the fact that it did not inquire into the costs of local government or could not to any degree. What was inquired into was how to better fund local government. If this House local government in New Zealand and indeed the ratepayers are to get any relief in regard to local government rating there first needs to be a significant inquiry into the costs of local government. When the costs have been established and when a reason for the increase has been found then at that stage we can have a look at the matter of how they are to be funded. 
However that will not happen although I suspect we are in for a further rates revolt in the next few months as ratepayers across this country are faced with yet another significant round of rate increases particularly as this year local bodies are not constrained by the fact that they have their own elections. Indeed it is their first year of a 3-year term and most councils will be wanting to stamp their mark and as a consequence they will be prepared to undertake those things for which they stood. The matter of the cost will be met by the ratepayers. 
I want to focus on the Shand report and some of its recommendations. It did not go in the direction I suggested it should; nevertheless it is a shame that this Government in its Budget this year did not look to set any funding aside and in fact has not recognised any of the 96 recommendations of the Shand report. 
Christopher Finlayson 
: Why do you think that is? 
JOHN CARTER 
: Because it is too hard for a start. It is too difficult and actually if the Government did undertake any of these steps it would show that the Government has been at fault. 
Nathan Guy 
: Incompetent. 
JOHN CARTER 
: That goes without saying. Incompetence is the first name of the Labour Government. But it is not just incompetent. It has actually caused a lot of the problems. This report exposes the weaknesses and the faults but the Labour Government will not want to acknowledge any of that at all. 
Let us take for example recommendation No. 3. The recommendation is that councils move away from fully funding depreciation with the development of longer-term funding policies that take better account of intergenerational equity and the availability of longer-term debt-financing. Well I have to say that that is just common sense. Why should we expect the ratepayers of today not only to pay for what their needs are but also to pay for the ratepayers of the future as well? That is just common sense and I have to say that a lot of the recommendations in the Shand report are common sense. 
Christopher Finlayson 
: He’s a former Labour representative—Shand. 
JOHN CARTER 
: Yes that is true. But why did this Labour Government not pick it up? I guess it comes down to the fact that it was common sense and that is not a thing this Government deals in. 
Let us just have a look at recommendation No. 7 which is that local authorities be encouraged to charge for wastewater disposal by volumetric charging. Again it is a no-brainer. It is just common sense. But unfortunately the Government and the Minister of Local Government have made no comment on that at all. I think that is most unfortunate. They spent a whole lot of taxpayers’ money on the Shand report. Surely to goodness we could have expected some response by now given that the report came out some 6 months ago. Recommendations Nos 9 10 11 and 12 all talk about rating systems and rate postponements and policies on the postponing of rates for rural properties. When we look at the issues around coastal properties the valuations and the costs that those are imposing on many farmers we see that it is a major issue. We seriously need to have a debate on it. This country and the ratepayers particularly those living in rural areas on coastal properties and indeed urban people on rural properties need to know that this Parliament understands the dilemma and the plight that people are facing with regard to their rates particularly those on single incomes all because coastal properties have gone up in value hugely and their rates have risen. Of course for the people who have been there for 30 or so years and bought them to retire in it means that they are now seriously struggling to meet the cost of those rates. 
This report makes a recommendation. One would have thought the Labour Government would want to address some of those things to help those ratepayers particularly those on fixed incomes but also the farmers who have significantly higher rates because of property values but are not getting the income from them. One would have thought the Government would want to show that it understands some of those things but it has not bothered to address it at all. 
Let us look at recommendation No. 19 which is that local government should look favourably at making use of debt to finance long-term assets. It goes on to say that this should include the issuance of bonds on the capital market not just short-term borrowing from commercial banks. Again that is all common sense. It is the sort of thing one would have thought this Government would want to put into its mix. But it has not done so at all. 
There is a great deal about rates rebates in the report but the only comment I have on rates rebates is that they are needed because of the huge costs this Government has put on to local government thus forcing up rates and as a consequence people on low incomes cannot afford them. So what did the Government do? It gave another handout. But would it not have been better to reduce the cost of the rates so that people did not have to meet the cost in the first place? Then we would not have to go through the situation where people are reliant on things such as rates rebates. 
Sandra Goudie 
: And they are still adding costs. 
JOHN CARTER 
: Well it all adds costs of course but this Government is quite happy to hand out other people’s money. 
If we look at recommendations Nos 72 73 and 74 through to 76 etc. we see that they talk about long-term council community plans. That is another issue that has been of significant cost to local government. It worked out to be a very good thing for local government but it does not have to be done every year or every 3 years. It should be long-term and should be considered. This Government had the opportunity to address the costs in local government. It had the opportunity to implement the recommendations of the Shand report but it has done absolutely nothing for it or for local government or for ratepayers in this country.