O'Rourke Denis: Local Government Act 2002 Amendment Bill (No 3) — Second ReadingText is incorporated into the Bound VolumeO'Rourke Denis: Local Government Act 2002 Amendment Bill (No 3) — Second Reading[Sitting date: 22 May 2014. Volume:699;Page:18294. Text is incorporated into the Bound Volume.]DENIS O'ROURKE (NZ First): It has always been clear to me that this National Government hates local government. It always seeks to diminish it. It always seeks to micro-control it. It always seeks to castrate local democracy in decision making. It thinks it knows best and that local councils need to be told how to deliver facilities and services. In fact councils already do long-term planning have fair development contributions and do not need to be told how to suck eggs by this Government.The worst part of this utterly misguided Local Government Act 2002 Amendment Bill (No 3) is the new and totally unnecessary provision about development contributions. This is retrograde legislation that will worsen local government performance not improve it. The changes will reduce costs for developers but will increase costs for ratepayers. National has clearly been influenced by developers who will no doubt make donations to the National Party. But National spits on the needs and rights of local communities to make their own decisions about what is fair and appropriate and who pays for what.The reason these provisions are misguided and unnecessary is that they will not help to substantially reduce the cost of new homes. That is supposed to be why the limits on development contributions are being introduced although the last speech I heard from Mr Heatley hardly justified that at all. In fact the reason is to help National’s developer mates to make more money.Local Government New Zealand figures show that development contributions comprise an average of only 4 percent of the cost of a new home. These new provisions will reduce development contributions by only 10 percent at the most. Overall the effect of these changes is to reduce house costs by a pathetic 0.4 percent on average—big deal.The truth is that these provisions show that National is utterly bereft of ideas about how to solve the housing crisis which it has spent the last 5 years doing next to nothing about. This bill is all it has to offer along with a pathetic $3500 per home reduction in duties on building materials. These things are not just drops in the bucket; they are drops in the ocean. These measures are a poor excuse for a real housing policy. What is needed in this country is a comprehensive long-term housing plan as set out in New Zealand First’s housing policy.In his speech introducing the bill Maurice Williamson spoke about the principles in relation to development contributions. He showed how badly National has got this wrong. This is what he said: “The range of infrastructure for which development contributions can be charged will be narrowed. This narrowing reflects the principle thatdevelopers should pay only for the infrastructure that is required by the development whereas communities pay for the infrastructure that will benefit the whole community.” What absolute nonsense that is. The true principle is that development contributions must provide a fair proportion of all facilities the whole community needs which they have sought from their councils. So these new provisions are useless ineffective and utterly misconceived and are based on totally the wrong principles.Another so-called principle is the one in new section 197AB(c) inserted by clause 48 which says: “cost allocations used to establish development contributions should be determined according to and be proportional to the persons who will benefit from the assets to be provided (including the community as a whole) as well as those who create the need for those assets:”. What absolute nonsense that statement is. How could it possibly be proportionate both to the persons who benefit and to the community as a whole? It is an utterly illogical and self-defeating statement. It shows just how badly this bill has been thought out.Another principle is in new section 197AB(d)(i) also inserted by clause 48 which requires development contributions to be used for the activities for which they were collected. This effectively requires hypothecation putting all contributions into special accounts to be used only when by some unknown mechanism they can be spent. That is not only unnecessary but an absolute bureaucratic nightmare to administer and is very very badly thought out.These changes on development contributions deliver no new benefits unless of course you regard 0.4 percent on an average house to qualify as a benefit—so really there are no real benefits at all—but they are bad news for ratepayers because they will ensure that rates go up and go up fast. That is not what the people in this country are looking forward to. Rates are high enough already. This Government has in the past railed against rates increases and now it is putting them up with this legislation. Well let me give the Government a message—Paul Goldsmith: Well spend less.DENIS O'ROURKE: —and especially that member who just interjected—there is no free lunch. If development contributions go down then believe me there is no other thing than for rates to go up.Paul Goldsmith: Well spend less.DENIS O'ROURKE: Spend less? Spend less? I will come to that. I will come to that in just a moment.In Christchurch the additional cost from this bill will be $32.2 million over 10 years. That is the council’s own estimate and of course that has to be found in rates. That is why the rates will have to go up and go up significantly. That is in a city that is already stressed in the provision of infrastructure and a council that is already struggling and struggling greatly in dealing with its costs for the reasons we all know. But that is not all.These changes will also drive down both the scope and range of community facilities provided by councils as demanded by their communities. That is the answer that I give to that member Paul Goldsmith who just interjected. He says “Spend less.” Well it is not that easy. The fact is that communities do not want to have the scope and range of community facilities reduced; they want them improved. The proper way to do that is a fair proportion to be met through development contributions. This bill will not deliver that but more than that it also drives down the quality of those facilities. In fact the truth is that if this bill passes and is implemented and I hope it will be repealed if it does pass then many such facilities will not be built at all.The bill limits the use of development contributions to only community halls playgrounds and toilets. That is pathetic. There is a long list of other things that shouldbe included: community libraries; kids’ swimming pools; adults’ training pools; gyms and fitness facilities; local parks area sports fields and facilities; facilities for the elderly; reserves for conservation drainage and retention; and similar purposes. All these are necessities to build communities—not just housing ghettos.Furthermore there is the effect of development contributions in driving capacity increases not just for water sewage drains and local roads for new developments but also for arterial roads as capacity demands increase for them including bridges and traffic control infrastructure also major sewage and drainage collectors and pumps public transport facilities and services and the list goes on. The limit in the legislation is ludicrous. Not only is that short list ludicrous but the effect is disastrous for local government causing rates to increase unfair and ineffective development contributions regimes to be implemented and a reduction in the scope range and quality of local facilities while delivering no real reduction in the cost of new homes at all.