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"Look at me, I'm on a bus!" Second-prize winner in the "my council spends too much awards," |
If you're "lucky," they've only risen by under 3 percent — that's if you're under the regime of either the Whanganui or Waitomo District Councils, or the Bay of Plenty Regional Council. You, dear people, are the "lucky" ones. Only a 3-percent rates rise
Not so lucky however if you live under the arm of the Clutha District Council, Upper Hutt City Council, Waipa District Council, Hamilton City Council, or Hastings District Council. If you're unlucky enough to have those folk on the letterhead of your. rates bill, then you're forced to pay more than 15 percent more this year than last year.
THE FIGURES ARE FRIGHTENING. BUT they still don't reveal the whole truth. 'Cos even with rates rocketing, these profligate bastards still can't pay their way. They're not just over-spending, they're over-borrowing.
At least 11 councils have net debt-to-revenue ratios of more than 200 percent.
Hamilton is on 281 percent, just four points away from the limit on councils’ debt covenants. Queenstown Lakes is on 265 percent. Tauranga is on 248 percent now, but forecasting to blow the 285 percent lid from 2030 onwards.
“Some are reaching their debt ceilings, which will have the auditors in a twist,” says [Greater Wellington's Spender-in-Chief Daran] Ponter. “That’s a real issue. If you look to the UK, Birmingham has effectively gone into liquidation in the last few weeks. There’s a city of two to three million people that basically can’t pay its way anymore.”
Hamilton’s mayor Paula Southgate [42% rates rises over three years]and Local Government NZ vice president Campbell Barry, who is the Hutt City mayor [45% over three years], today published research showing the wide gap between council revenues and capital spending obligations, over the 10 years of the new longterm plans.
The research, by Infometrics, shows councils had already committed to $23.3 billion capital investment from 2021 to 2024. Infometrics principal economist Brad Olsen says once construction inflation is added in, that’s nearly $3 billion more.It's all very well for Nicola Willis to say she wants councils to "stick to the basics" and "not waste ratepayers money" — "focusing on the things people expect them to do, which is the rubbish, the roads, the pipes, the basics - and not all the fanciful projects" — but she is doing damn all about it.
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| Sandra Lee, 2002: Let's get councils spending more, and doing less core |
JUST OVER TWO DECADES AGO, in 2002, the then-Local Government Minister was the hard-left Alliance Party's Sandra Lee. And it was then that local government debt began to rise dramatically — not because councils around the country were over-investing in infrastructure; not because they were going hard on their core business; not at all because they were building, maintaining and upgrading roads, bye-roads, drains, pipes and parks as they were damned well supposed to. For the most part, instead, with some significant exceptions, they weren't. What they began building instead was a lot of expensive fucking monuments.
Monuments mostly to themselves.
The culprit here was Sandra Lee's Local Government Amendment Act 2002, which granted to city councils, district councils and regional councils a "power of general competence" (I know, right?) which would enable them to enter into any activity they wished, with the only limit being their imagination and the pockets of their ratepayers.
Prior to Sandra Lee's Local Government Act, councils could only do what they were legally permitted to to, i.e., to carry out their core business. After Sandra Lee's Local Government Act, however, the leash was off. And council credit cards started straight away racking up debt for vanity projects everywhere.
I'd like to say I told you so. I'd like to, so I will. Because I was as outraged then as I am now:
Libertarianz Leader Peter Cresswell is outraged at today's announcement by Helen Clark and Minister of Local Government Sandra Lee to grant local authorities "a power of general competence" in order to "enhance the well-being of their communities." "The well being of everyone in a community is more likely to be enhanced by retaining a tight leash on councils," says Cresswell, "since most councils have already well demonstrated they struggle for competence."
"Local government throughout New Zealand's history has demonstrated its utter incompetence in handling the loot they confiscate from ratepayers by wasting it on such idiocies as the New Plymouth Wind Wand, the Auckland Britomart edifice, and the Palmerston North empty civic building." he said. ...
"More substantially," says Cresswell, "there is a crucial constitutional principle at stake -the constitutional principle that citizens may do whatever they wish, apart from what is specifically outlawed, whereas governments and councils may only do what is specifically legislated for. The main purpose of this constitutional principle is to keep a leash on government, both central and local. It is this leash that is beginning to gnaw at local governments, and it is this leash that Clark and Lee propose to untie."
"It is a dangerous step to take," warns Cresswell, who points out that councils are being given more 'freedom' at he same time as the Resource Management Amendments Bill threatens to take away even more freedom from New Zealand property owners. "The constitutional principle is being reversed," he says. "Even as they propose giving local government wider powers to act, they are taking away the power of individuals to act for themselves," says Cresswell. "Every property owner should rise up in protest," he says.
"Libertarianz will be making a strong submission on the consultation document," says Cresswell.
Which we did. For all the bloody use that it did: The Clark Government passed it, a succession of Local Government ministers since since has kept it, and every bloody local councillor ever since Sandra's "permissive" Act has spent like a drunken sailor on shore leave with a start-up founder's credit card.
The New Zealand Local Government Funding Agency (LGFA) supplies around two-thirds of that council debt, and last time I looked their tab was just over $18 billion. That's about $20,000 for every ratepayer. Add to that an existing $5 billion of Auckland and Christchurch council debt. And those numbers are every year by around a billion a year as ballooning rates rises fail to keep up with even-more ballooning council spending.
And as you can now see, it's not like they've been spending much of it underground.
In Christchurch they've been turning the city into "an innovative and modern community with major facilities from Akaroa Wharf to Te Kaha Canterbury Multi-Use Arena." In Wellington they've been watching the city's infrastructure crumble while they vote to spend hundreds of millions on earthquake-prone inner-city monuments of questionable value. And here in Auckland, council have allocated yet another billion dollars (plus fuck-ups) to pour down the ever-expanding black hole of the train set with the ever-disappearing-opening date, plus several hundreds of millions more to continue transforming the place into "one of the world's most liveable cities."
A shame there are still very few plans to make it an affordable one.
What on earth is to be done?
You know, here's an idea.
Instead of keeping Sandra Lee's Local Government Act and binning Three Waters, which is where this new Coalition Government went, how's about — and hear me out, now that you've all heard the story —how's about we bin Sandra Lee's act and tell fucking councils to stop over-spending, to close down their PR departments, and to get back to their core fucking business.
Maybe you could suggest something like that to Simon Watts, who's the current Local Government minister.
But you'll have to explain to him first who Sandra Lee is, and what she did back then to stuff things up. Because the gormless twit does appear a bit simple.
UPDATE: It's been pointed out to me that Simon Watts is trying to overturn some of Sandra Lee's Act, and argued that I've been unnecessarily harsh about him in my conclusion.
3 comments:
I never saw your piece at the time but was equally pissed off with the Sandra Lee Act because I saw it as the Left's way of continuing to push all their bullshit even when they were out of power in central government.
And that's exactly how it's turned out.
But as usual I'm more pissed off with successive National-led governments that never reversed this, apparently because they were too dim to see how it would screw over their own voters, and ultimately them.
It's of a piece where National does not contend in local body elections, presumably because they still think it's the cosy old world of Town Clerks and the like, instead of the shiny and expensive Corporate Clones of today.
@Tom: It should have been repealed in the very next National-ACT term by their very next Local Government Minister.
Except their very next Local Government Minister was Rodney Hide (2008-11).
And he was more interested in his own baubles of office to care about what his office did.
And after him was the egregious Nick Smith ...
Abolishing the four well-beings is what is happening, which is all very well, but what needs to be done is to specify what local government should be doing. DIA officials will have, of course, advised against this because it requires them to do a lot of work, but it would be a great opportunity to have a debate about it. A rates cap would be helpful too, but no doubt councils and those who profit from them have been lobbying against it.
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