Thursday, November 02, 2006

Rates Review complete waste of money

The government’s recently announced review on local authority rates is nothing to get excited about. New Zeal describes it as vacuous and I agree. The terms of reference are here. The key point is that this review is not about whether councils do too much or are inefficient. Nooo, it is about how best to pluck the turkeys. You’re the turkeys, you don’t like rates so much, so there might be new ways of plucking you that mean some of you are plucked more than others, and that some of the plucking is done with anaesthetic (i.e. you wont notice, such as a local sales tax). *
You’ll still be thoroughly plucked by local government. Check out this key assumption in the review:
*
The inquiry is not a review of the system of local government per se, and in particular of the purpose, autonomy, or structure of local government; or · the principles of democracy, transparency, equity and accountability that local government operates under
*
In other words, there will be no more accountability or transparency for what local government does. Excited? I thought not. It IS about what revenue raising mechanisms could be available and what exemptions exist for rates. In other words, changing from rates to something else – something else that makes it easier for local government to strong arm money out of your bank account.
*
So what does everyone else think?:
*
The Greens welcome the review because they want poor people to pay less and businesses and wealthy people to pay more (it’s pretty obvious). The Greens like local government, especially when it stops people using their land in ways they don't like, or subsidises public transport and doesn't build roads.
*
The review has been concocted with New Zealand First. This is to stop Winston supporting Rodney Hide's Bill which would have made a real difference (and upset Labour oriented local authorities). Winston has said: “New Zealand First campaigned on this and was the only party calling for an independent inquiry when the rates issue intensified earlier this year” Well, because half of the other parties supported Rodney Hide’s Bill. What a fizzer Winston, even if this review reduces the rates bill for the elderly, by the time anything is done, some of them will be dead. Winston says there is a prospect for real change – well had he supported Rodney Hide’s Bill there would have been real change.
*
Rodney Hide, whose bill on capping council spending would have started to make a difference has condemned the review saying:
*
There is nothing in this inquiry that will deliver lower rates to ratepayers, put rates under control, or deliver the infrastructure or services that ratepayers so desperately need.”
*
Quite right. Rodney is the only MP who proactively put forward a proposal to limit increases in rates to the rate of inflation (which is still too much, as rates rise with property values which grow above inflation).
*
The Nomorerates.com campaign is also disappointed and is urging people deliver submissions expressing how they are affected by the current system.
*
Local Government New Zealand (which represents councils) wants more of your money taken through central government to fund local government (in other words, councillors wouldn't have to argue with you about rates increases). Nice - more money, less accountability.
*
United Future rightly claims the review doesn’t go far enough. Peter Dunne is on the ball on this one:
*
"Rates are only a symptom of the problem which is the size, role, scope and activities carried out by local authorities.”

*
Indeed – and as a party keeping Labour in power, you might hope there could have been some influence in this, never mind Peter Dunne is still a Minister.
*
National agrees that it doesn't tackle the key issue, with John Carter saying:
*
Yet, one of the single biggest issues in local government does not appear to be in line for any attention at all with this inquiry. That is the question about which activities ratepayers believe their local councils should be involved in
*
The Maori Party thinks that the public consultation process excludes Maori and want Maori to have a “special say”. Nevertheless, an excellent point is made that:
*
“Large tracts of Maori freehold land are unoccupied and unimproved. This land creates a significant rating burden on the Maori owners who often do not have the means or, in some cases, the desire to make economic use of the land”.
*
Indeed, there shouldn’t be rates applied to that land, or to any land regardless of the owners. However, the Maori Party is not interested in rate relief for non-Maori - it has an apartheid world view.
*
Local government should be put on a diet, which means a permanent cap on rates which would encourage councils to shift to user pays, sponsorship and voluntary donations to pay for their activities – and to privatise activities like housing, rubbish collection and water. Such a simple cap would provide a painless way to encourage councils to innovatively find new ways of funding their activities through choice not coercion. Note that many councils will actually face continued increases in rates revenue because as property prices increase, so do rates. Ideally, local government should be privatised, cut back and phased out - a simple step now is to force them to work within their current budgets and to stop rates rising at all - then some hard choices would have to be made - about how best to spend a limited amount of other people's money.

3 comments:

Anonymous said...

I have a good rule of thumb that I follow:

If the Greens are for something it's bad. Bad for liberty, bad for freedom and bad for the country.

Simple really!

EXOCET

Gloria said...

A review of the rating policy and exemptions for Maori land is long overdue.

I know of a number of Maori who refuse to pay rates. Their reasons vary from argueing that they shouldn't have to pay rates when there are no services to the land, ie. water or sewage services or roading, to believing in Maori sovereignity.

Although I don't agree with the above reasons, Maori, on limited income, can incur substantial rate bills on large tracts of unoccupied and unimproved land. Many have no alternative but to simply not pay.

A national rating policy that sees Maori and other land owners only paying rates on the developed and occupied portion of their land in my opinion would be justified. The point that Maori or any one owning similar tracts of land would benefit on resale of the land due to inflation is a fair one. However, other ways to allow for this should be looked at for instance, a council duty on the sale of the land.

libertyscott said...

I'd simply question why rates need to exist in the long term at all, most of what council's do can be funded by other means - voluntarily.