Shirley Ken: General Debates 
Shirley Ken: General Debates 
[Volume:610;Page:7452] 
Hon KEN SHIRLEY (Deputy Leader—ACT NZ) 
: 
 Today’s  
Dominion Post  
editorial makes a salient observation. It states: “When everyone from small poor households to the Reserve Bank governor is expressing concern about local authority rates rises it would behove local authorities to listen.” Over the past decade local government rates have been rising faster than inflation. Rates are identified as a key driver of inflation and that has been a prevailing situation for a decade or more. Inflation is sitting at 1.5 percent. We have a Fiscal Responsibility Act and we have a band of inflation that we instruct the Reserve Bank governor to manage our monetary policy to keep us within. No such constraints are on local government. Rate rises are running at 4.5 percent and they have been running at 4.5 percent over the past decade. It is an intolerable situation. 
I turn to the Auckland Regional Council. I single it out because it has presented the community of Auckland with a rate increase of 34 percent on average and some are facing rate increases in the order of 650 percent. I have to say that I have some sympathy for the Auckland Regional Council. It is in a quite invidious position. It is not without fault but it has been backed into a very invidious position by this Government. This Government refused to amend the Rating Act—in fact it did amend it in 2002 but refused to address the basic problem of levying property tax putting taxes on property to pay for all manner of services that are not related to that tax. That has been a cry from local government for decades—to be fair I would have to say under successive Governments. This Government had the opportunity to address that basic problem when it did the rating review in 2002 but failed to do so. 
The Government compounded the problem with the Local Government Bill which was rammed through the House under urgency earlier this year. What it has done is import into local bodies a whole new level and range of costs under the name of participatory democracy rather than representative democracy. What it means is endless consultation endless meetings one cannot get decisions made and ratepayers are just starting to be presented with those obligations. The reason I have some sympathy for the dilemma the Auckland Regional Council is facing is that we know that there have been deferred capital investments and deferred maintenance of infrastructural utilities—and it is undeniable that there is a need in Auckland for some fairly massive investment. But the situation is compounded by the fact that sensibly the Auckland Regional Council adopted capital value rating and I commend that whereas most of the authorities in Auckland—all but one I believe—are still on land value rating. 
It is further compounded by the fact that the North Shore local authority has differential rating. It charges business and commerce nine times more than residentials on an ad valorem dollar basis in their rating. That is bizarre. On the one hand it says that it faces massive congestion and all the commuters go into Auckland City for their jobs yet although the very things that could create the jobs on the North Shore the industry and the commercial activities are there they slog them for rates at nine times the amount they charge for residential rates. 
It is further compounded with the massive increase in land valuations on the North Shore. The valuations of some of those fine properties on Takapuna waterfront have escalated. The upshot of all that is the Auckland Regional Council has this massive task of investing in the transport system. But therein lies the problem. Why should property rates and property tax have to fund the services that some people have never used and have no intention of using? That goes right back to the failing of this Government to address the basic problem.