Copeland Gordon: Local Government (Rating Cap) Amendment Bill — First Reading 
Copeland Gordon: Local Government (Rating Cap) Amendment Bill — First Reading 
[Volume:617;Page:12688] 
GORDON COPELAND (United Future) 
: 
 United Future will not be supporting this bill. That said I should say immediately that United Future shares the concern expressed by the bill’s sponsor Rodney Hide. In a number of instances recently rate increases have been way too high and beyond affordability for many people including those on fixed retirement incomes. 
However whilst United Future agrees with the diagnosis set out in the explanatory note to this bill we disagree with the treatment prescribed. This bill smacks of the cost-plus mentality that used to prevail in this country in the Muldoon years. This bill is a Muldoon-style bill. Experience during those years demonstrated that if we give local authorities in this case the ability to ratchet up rates each year by the consumer price index plus 2 percent that is exactly what they will probably proceed to do. 
In addition as a party that voted for the power of general competence to be bestowed on local authorities through the Local Authorities Act of 2002 we think it is far too soon to rush to the conclusion that a restriction of that power is now justified. We have not allowed the new Act to bed in. I believe that the wiser course of action is to allow local councils the freedom to run their own affairs without further interference from central government. 
That said the principal reason why United Future opposes this bill is that we have placed in the ballot a members’ bill in my name to zero-rate GST on rates. We believe that that is a better solution to the problem. The enactment of my bill would see an immediate reduction of 12.5 percent in the out-of-pocket cost for all residential ratepayers in this country. This idea has the strong backing of Grey Power and many citizens’ rating action groups up and down the country. It is a principled position since in terms of tax policy if GST on rates is justified then GST on income tax is likewise justified. It is inconsistent and therefore wrong to impose GST on local government’s taxation of its citizens simply because the name “rates” is attached to that taxation whilst at the same time exempting rates levied by central government from GST. 
I am hopeful that my bill will be selected from the ballot in the near future. If so I hope other parties in this House might give it their support since it will continue to allow local bodies the power of general competence but at the same time reduce the rates burden. When we think about it we can see that the restraint on the power of general competence we have given to councils should in fact be the democratic process. They are up for re-election every 3 years and will if they want to stay around for a while listen closely to the concerns of their citizens. This bill interferes with that relationship. 
By contrast the bill United Future is proposing is an action that central government can and should take in the interests of reducing the overall tax burden resting on the shoulders of hard-working New Zealanders and those who are endeavouring on fixed incomes to enjoy their retirement years without undue financial stress or worry.