When will they withdraw council’s “powers of general competence”?

2002 was a red letter year for ratepayers.

Before 2002, councils were constrained to only do what they were empowered by law to do. After 2002 however, councils could do whatever the hell they liked, and send you and I the bill.  It was Sandra Lee’s 2002 Local Government Amendment Act that was the key. This was the Act that gave them what is called, with a straight face, the power of general competence.

Overspending councils were given carte blanche by Sandra Lee’s 2002 Local Government Amendment Act to become rabidly indebted over-spenders. And, oh boy, they sure have. 

One way these desperately overspending councils have tried to claw back some readies is by levying hundreds of thousands on builders and developers—who are considered by most good council men and women to be ripe sucks whose wallets are ripe for the plucking, with the contents filched therefrom spent on whatever makes their hearts content.  Like monuments. And skate ambassadors.

The result, for housing, is this: fewer houses are built because the exorbitant levies make them cost more. And those that are built cost buyers more.

This is just one of the many reasons our cities have severely unaffordable housing.  Indeed, in the run up to New Zealand’s house price  inflation, this component—having trebled over the last decade--is second only to the rocketing price of land as being responsible for the exploding cost of house-building.

Enter, stage right, the National-led Government, who say today—finally- they are “taking aim at section charges levied by local councils.”

“We are going to narrow the charges councils can put on new sections, provide an independent objections process and encourage direct provision of necessary infrastructure to get costs down,” Housing Minister Dr Nick Smith and Local Government Minister Chris Tremain said.
    Development contributions had trebled nationally over the past decade and had gone up more than any other component cost of a new house, the two said.
    "This huge increase can be attributed to the local government law change in 2002 that gave councils carte blanche to charge whatever they liked and removed any check or appeal on these charges. These charges now average $14,000 per section but can be as high as $64,000 per section,” Smith said…
    "There will always be pressure on councils over rates and we need a check on development contributions to ensure the new home owner is not over-charged," Tremain said… 
    The changes mean that councils will only be able to charge for new infrastructure and not recreational facilities or reserves for developments that do not involve residential housing."
    Tremain said councils would still be able to charge for infrastructure and resources directly associated with a new subdivision.

A change—and a necessary and much overdue one.

But when is this National-led Government going to reverse Sandra Lee’s gift to overspending councils of this absurdly oxymoronic “power of general competence.”

It’s reversal is long overdue.