New Zealand Parliamentary Debate

Local Government (Rating Cap) Amendment Bill [4473]

I believe there is a mistake in my bill, and it is this. In order to get the support of the House, the bill states that if a council wants to go higher than 4 percent plus inflation over 3 years, or 2 percent plus inflation in a year, it can go to the Minister of Local Government and get an exemption after having to put a case publicly. I believe that is a mistake. I included that provision because I thought it would be a cost-effective way of managing rates increases, but I believe we should make it so that councils can increase their rates above that amount only by having a referendum of the ratepayers. It should be the ratepayers who get to decide whether their rates are to go up faster. If the local government has a good reason for increasing rates, then I am sure the people will go along with it. So I believe we can fix that mistake in the select committee and actually give the power to the people-the ratepayers.

Again, I ask New Zealand First members what they have against ratepayers in New Zealand that they will not let them have that say. I again ask New Zealand First members, having heard them trumpet their concerns about rates and about people on fixed incomes, why we do not just have the debate. Why is this Parliament so scared to debate the issue of rates and how they are controlled?

How will we have that debate? At the appropriate time I will be moving that this bill go to the Finance and Expenditure Committee. That is the appropriate committee for this bill. Why? Because every party is represented on that committee. Under Mr Shane Jones' admirable chairmanship, it is supposedly the most powerful committee in this Parliament. So that is where I will move that this bill goes to be considered, so that every party will get to have a say and some input, and so the people of New Zealand will be able to come to Parliament and explain their situation with regard to their rates, the demands they are having, and the fact that they are losing their houses and homes that they have lived in for their entire lives. I look to New Zealand First and ask why its members would deny New Zealanders the opportunity to make that contribution.

Hon NANAIA MAHUTA( Minister of Customs):

I rise to oppose the first reading of the Local Government( Rating Cap) Amendment Bill. This recycled bill is identical to the one that the previous Parliament decided should not be read a first time, back in 2004. I see no reason today that would make this bill any more worthy of parliamentary time than it was then.

The bill purports to help ratepayers. It will do no such thing. The author of the bill has forgotten or ignored a lot of things. First, rates are not the only funding source for local government. One of the first consequences of the enactment of this bill would almost certainly be increasing levels of user-pays for community facilities like libraries, swimming pools, and sports grounds. Who among us wants to discourage people from reading with their children because it costs too much to take out a book? Who wants to discourage physical exercise? This bill will do precisely that.

Second, the bill controls the total level of rates levied by the local authority, yet the average rates increase is only one of the factors that determines the level of rates paid by an individual ratepayer. Also relevant are movements in property values or a shift in the incidence of rating from one sector to another. A highly desirable water view property may increase in value more than neighbouring properties with no view, which means the ratepayer may well pay more in rates than last year's rates, plus the consumer price index.

Supporters of the bill are apparently labouring under the illusion that the bill will promote the accountability of local government to its communities. It will not. In fact, it would reduce the strong system of accountability and transparency that the Local Government Act 2002 has established. Local authorities have just completed their first full, long-term council community plans. These plans set out what services the council will provide-the quality and the cost. Where communities have been opposed to the