Local Government Act Amendment Bill

Federated Farmers
Media Release

Local Government Bill passes, but funding must be next

30/11/2012 4:10:00 p.m.

Federated Farmers welcomes the passage of the Local Government Act Amendment Bill, but more must be done to contain and reduce the rates burden.

“The passage of the Bill is good news for ratepayers. Since 2002 rates have increased an average of 7 percent per year,” Ms Milne says.

“This growth is unsustainable and to rein it in councils and communities need better guidance and clarity on local government spending priorities.

“The Bill does this by changing the purpose of local government away from its activist, open-ended job description towards something more like what most people think local government should focus on: local infrastructure, local public services and local regulation.

“However, the Bill really just tinkers at the margin and will only go part of the way to containing and reducing the rates burden.

“What‘s needed now is funding reform, which so far has been the missing element of the Government’s work.

“It is well known that rates fall heavily and inequitably, with farmers being particularly hard hit. Far too many farmers pay more than $20,000 per year in general rates to fund activities they barely use or benefit from.

“What is perhaps less well understood is that funding policy also affects councils’ regulatory performance, especially when central government makes laws for councils to enforce, but does not provide any resources. The incentives are all wrong.

“We also think limited funding options are a factor in housing affordability, for example when councils impose high development contributions that push up the costs of sections.

“The burden of funding local government must be spread more equitably and that means moving away from the over-reliance on a 17th century system of property value rates and finding new and better tools for councils operating in the 21st century.

“Federated Farmers has always been up for this debate. With growing concern about housing affordability we sense the time is right to make some progress,” Ms Milne says.

For further information contact:

Katie Milne, Federated Farmers rural security spokesperson, 0274 244 546, 03 738 0189

Link to article

Related Post:
24.9.12 DCC against imposition of local government reforms

Posted by Elizabeth Kerr


Filed under Business, Economics, Media, Name, People, Politics, Property

2 responses to “Local Government Act Amendment Bill

  1. Mike

    Reading through the amendments mostly this bill is largely a bill regularising Canterbury style central government takeovers of local authorities, as such it’s a big stick and should make us, and in particular our elected representatives, very worried.

    There is one change though – section 10(b) changes the “purpose of local government” from:
    “to promote the social, economic, environmental, and cultural well-being of communities, in the present and for the future”

    “to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses”

    where “good quality” is defined to be “efficient, effective, and appropriate to present and anticipated future circumstances”.

    Which to my reading means that council and its entities like DVML have to plan so that whatever they do is done in a manner that has the least (that word “most” there) impact on rates, and they have to include debt servicing costs (“anticipated future circumstances”) – DVML has lots of choices for how they fund themselves, but going to the ratepayer must now be the very last option, in fact is must be ahead of the option of not spending any money at all – because the very purpose of local government is now minimising rates (not just rates rises but absolute rates) – that has to mean for the stadium user fees rather than any other alternative.

    I think it’s probably time for a group of interested ratepayers to get some legal counsel and enjoin the council and its minions from any future actions contrary to the new act. We live in interesting times.

  2. Hype O'Thermia

    It’s well overdue, this reining back of elected and unelected council people with “visions” and career-enhancing “bold initiatives”. Take care of the basics and when there’s spare money, that’s the time for individuals to go off on tangents – except that now there will be a whole lot of other individuals casting hyper-critical eyes over anyone’s pet project because it will be either-or with the “spending money” instead of what we’ve endured, and-and-and-and-and because we can make the ratepayers pay more and more and more.

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