Sunday, March 11, 2012

Nick Smith might be about to do some good

Yes, I am flabbergasted, but there is every potential Nick Smith might do something positive in his career for less government and more freedom.

In fact he'll demonstrate that as Minister of Local Government he will achieve more in that department than Rodney Hide.  According to the Dominion Post, he has announced the Government is looking to curb council powers by revoking the "power of general competence" introduced by then Alliance Minister of Local Government, Sandra Lee, in the first term of the Clark Administration.

The report states that "he will pare back the scope of local government functions so they will only have control of essential local services such as waste, water, roads, libraries and consents".   

If so, it will remove the power of councils to get involved in any area of public policy they wish.  You see Labour, the Alliance and the Greens supported the current wide ranging powers on the philosophical basis that councils should only be controlled by voters - that if voters elected councillors that wanted to make ratepayers pay for a street race, a wind wand, a tv station, a restaurant, a housing block, a tourism promotion in Japan or a farm, they could.  

It is a classic example of basic statism - that government should be absolutely unlimited, except for democracy. That government can buy any business, set up any activity, spend money on anything.  The only limit being the motives of the elected councillors.  The idea being the councillors represent the "will of the people" and they wont want to do anything that wastes money, because they face the penalty of being - voted out.

Now the truth is that this is little check at all on local government.  For a start, losing your council position is small penalty for wasting millions of dollars of other people's money, for putting people out of business, for being part of decisions to borrow millions that future ratepayers have to pay for or for eroding people's property rights.  It's like a company director being able to make stupid decisions for three years before shareholders can vote him down.  Imagine being able to be incompetent for three years before losing your job.

Secondly, elections are not a constraint when councillors can spend the money of all ratepayers to support vocal rent-seekers in the form of council workers, preferred businesses, non-governmental organisations or other ginger groups.  The rights of all citizens of a city or district can easily be surrendered by bribing vocal minorities with other people's money.   The cost to individual ratepayers of a single decision may be a few dollars a month, which they wont get too upset about in themselves, but which can easily curry the favour of lobbyists.

Finally, local government elections have never been a great representative of endorsement by citizens, because turnout, even in postal elections has been low, particularly in larger metropolitan centres.  Whilst rural districts can get turnout of 60-70%, urban ones can be as low as 30%.   Many people find councils mind-numbingly tedious, and activist councillors take advantage of that.  It helps that only property owners are legally liable for rates, but everyone who is on the electoral roll can vote in council elections - a majority of whom are not liable for rates.  As landlords can't simply raise rents automatically when rates rise, it means representation without taxation.  Indeed, Sandra Lee also abolished the vote for property owners in a district who are non-resident.  So you can be forced to pay rates, but have no right to vote for those who decide on how to set them.

A classic bit of left-wing envy ridden denial of the democracy they claim to support so much, tinged with xenophobia (think districts where there are high numbers of holiday homes). 

Nick Smith's reforms appear promising, although I'd argue there needs to be a more fundamental question asked as to what local government is needed for, at all.

He said "Water, roads, footpaths, libraries, local regulatory services – where you go to get your building consent, resource [consent], food safety, the dog control role"  are essential services.

Well I'd say, yes - if councils just did that, it would be one step in the right direction.  Yet one must question the others.  Water, libraries (and waste collection) could be easily privatised.  Roads require more effort, but can be commercialised (and new residential streets vested in body corporates of property owners).   Given I'd do away with the RMA, the whole building/resource consent function would be abolished.  The food safety and dog control functions could ultimately be undertaken by voluntary agencies.

Regardless of all that, I'll give Nick Smith a cautious nod in support for winding back the Local Government Act, with some advice about how to restrict councils:

-  Prohibit councils from entering into any new commercial activities, and require them to transfer commercial activities into SOE type arms-length organisations (called Local Authority Trading Enterprises once), and privatise them by sale, or distribution of shares to ratepayers, within three years;
-  Prohibit councils from entering into any activities already undertaken by central government;
-  Prohibit councils from increasing rates without Ministerial approval (which can only be up to inflation);
-  Return council elections to votes only from ratepayers, including absentee ratepayers;
-  Require councils to get out of any non-core functions within three years.

Doing this would go some way to constraining the petty fascists, the do-gooding busybodies and the numerous groups and second-handers out wanting councils to give them other people's money.

However, it wouldn't slay the biggest risk councils present to individual freedom - the RMA.

So while Nick Smith might be said to have turned a corner on this issue, he wont have really addressed how councils constrain individuals, businesses, clubs and other private organisations by eroding their property rights through the RMA.  So come on Nick, it's not too late to think again.  If they can't organise events, or be entrusted to pay their staff appropriately, why should they be trusted to take away people's property rights?

(can't wait to see what John Bank thinks of this).

1 comment:

Mark Hubbard said...

Timely post. Councils are currently racking up an irresponsible, and just straight frightening, amount of debt:

And, of course, once Smith has curtailed the powers of local government, he then needs to turn attention to himself and central government.