New Zealand Parliamentary Debate

Local Government (Rating Cap) Amendment Bill [4476]

New Zealand First has for some time been concerned about local body rates, and those concerns were reflected in its manifesto for the 2005 election. I will read out some of those policies: New Zealand First will... explore options to reduce the rates encumbrance on seniors with a fixed income;... review the legislative burden that central government has placed on local government-as the previous speaker talked about-and the impact of this on ratepayers...; and reduce the layers of bureaucracy which have increasingly been superimposed onto local government. Those are just some of the very significant issues around local body charges.

I happen to live in a place called Ngunguru on the beautiful east coast of Northland. Until the last couple of decades, Ngunguru was basically a seaside holiday spot joined to Whangarei by a dusty, winding road. Most of the dwellings were humble baches; some still are. But in the last quarter of a century, the place has been transformed. Property values have risen sharply and people who had modest homes are now asset millionaires. The trouble is that those same people are often reliant solely on superannuation. Rates are crippling many of those people and, as Rodney Hide explained, many of them are being driven to have to sell their homes.

The question is, does this bill address that problem? The answer is no, it does not address it. This bill limits the total level of rates, not the individual level. So if one part of a council's region has value increases and another has decreases, then an individual's rates could climb far higher than the limits set in this bill. Moreover, if a council's area has significant growth-say, by 10 percent more properties over 3 years; and we think in terms of the growth in places like Tauranga-then it will not have the capacity to raise revenue for the additional costs, because it is limited down to the increase in the consumer price index plus 4 percent over the 3 years.

The second issue is Government-imposed costs. Will this bill rectify what our local regional council chairperson has referred to as incremental cost creep? The answer is no, the bill will not rectify it-very simply because of what Rodney Hide has already admitted. The bill allows for the Minister of Local Government to provide dispensation to go above the limits imposed by this sorry piece of legislation. Are we to believe that central government, having imposed additional costs on local government, will refuse dispensation to councils that ask it to accommodate those imposed costs? Of course not! Councils would push increases to the level that is allowed in this bill, add central government costs on top of that, and then go to the Minister and ask for a dispensation. That is exactly what has happened in New South Wales. I want to make the point that much of the additional bureaucracy within local government stems from the need to comply with central government directions. So every additional bureaucrat will be factored in as arising from central government's compliance impositions, and will be added to the case for dispensation.

There is another important consideration. What happens when a local body seriously under-invests in infrastructural development over a considerable period of time? When that body is finally forced by circumstances to face reality-presumably with newly elected members, elected by people who have themselves seen there is a shortfall-then even if those people ask for increased expenditure on neglected infrastructure, the council will not be able to do it. The bill is nonsensical, and those who believe that sending it through to a select committee will enable an in-depth public analysis of the whole issue of local body charges are fooling themselves. Submissions will be confined to the very restricted concepts of the bill.

New Zealand First is calling for a well-resourced independent commission of inquiry, of the magnitude of the McLeod commission of inquiry into taxation, at central government level-and we will achieve it, unlike this bill, which will not be passed all the way through the House. Even if the bill passes its first reading tonight, I will make a