John MacDonald: Councils cutting costs? It won't happen. Here's why

It seems our local councils are in the Finance Minister’s line of sight. 

She’s been saying since the latest inflation numbers came out yesterday that, yes, it is somewhat positive that inflation is at 3.3 percent —just outside the Reserve Bank’s target— but she’s saying it’s not time to take the foot off the pedal. 

And she’s made it very clear who she is expecting to go heavier on the pedal, and that’s local councils. But do you really see that happening? Do you honestly believe that local councils are capable of reducing costs to the point that they actually play a role in reducing inflation? 

The thing with inflation is that it’s influenced by what’s going on outside the country - oil prices, wars, even elections in some of the bigger countries. 

And then there’s what’s going on within New Zealand. And, at the moment, two of the biggest domestic contributors to inflation are insurance costs and rates.  

In Waimakariri, rates are going up by 9.39 percent. In Christchurch, there’s a 9.9 percent average increase on the way. In Selwyn, it’s 14.9 percent. 

Then, of course, there’s the ECAN regional council rates,  which are increasing by 17.9 percent. It could have been worse. ECAN was originally proposing a 24.2 percent increase - but they trimmed the budget and got it down to 17.9. In Westland, people there are going to have their local council rates go up 18.64 percent and their regional council rates increase by 27 percent. 

The Finance Minister isn’t happy about that and wants local councils up and down the country to start doing their bit to bring inflation down. But I don’t think that’s possible. 

And it’s not about the councils themselves. It’s about us. It’s about you and me. 

It’s you and me who expect more and more from our local councils. It’s you and me who bang on about the council not doing enough to clear the leaves from the gutters during Autumn. It’s you and me who —when we see water pouring out of a broken drain somewhere— who want it sorted straight away. 

It’s you and me who want to be able to go to the library day and night, even though there might only be a handful of people there when we turn up. But the lights are on, the heaters are on, the staff are there. 

It’s you and me who expect our local council to be fixing the potholes in the roads and the cracks in the footpaths. It’s you and me who want to be able to talk to someone at the council 24/7. 

See what I mean? Until we start listening and understanding what the Finance Minister is saying about local councils doing their bit to cut costs and help bring inflation down further, nothing’s going to change. 

If we understand what she’s saying, we’ll stop criticising our councils from the sidelines and realise that the Finance Minister is talking to us —you and me— just as much as she’s talking to mayors, councillors and council staff around the country. 

Until we all listen, councils won’t have a hope in hell of tightening their budgets, cutting their costs, trimming their budgets and getting their costs down. 

Because the more we expect and demand, the more expensive things get. 

So, no, I don’t have any faith that our local councils can do what the Finance Minister wants them to do. Because we won’t let them, with all our demands and expectations. 

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Morning's Podcast with John McDonald
from Newstalk ZB.

Speaker 2 (00:13):
It seems that our local councils are in the finance
minister's line of sight. She's been saying since the latest
inflation figures came out yesterday that yes, it is somewhat
positive that inflation is at three point three percent, just
outside the Reserve Bank's target. But she's saying it's not
time to take the foot off the pedal, and she

(00:37):
has made it very clear. You might have seen or
heard her in the news over the last eighteen twenty
four hours, She's made it very clear who she is
expecting to go heavier on the pedal, and that is
local councils. But man, do you really see that happening?
Do you honestly believe that local councils are capable of
reducing costs to the point that they actually play a

(00:58):
role in reducing inflation. You might might have confidence. I don't.
I'll tell you why I think that in the second
The thing with inflation is that it's influenced by two things.
Generally what's going on outside the country, so oil prices, wars,
even elections in some of the bigger countries, and then

(01:20):
there's what's going on within New Zealand. And at the moment,
two of the biggest domestic contributors to inflation are insurance
costs and rates. In Wymaker Eddy rates going up by
nine point three percent just under ten christ Church is
a nine point nine percent average increase on the way
even closer to ten Selwyn fourteen point nine percent. And

(01:44):
then of course there's the ECN regional council rates which
are increasing by seventeen point nine percent. Could have been worse.
E can was originally proposing a twenty four point two
percent increase, but they trim the budget, got it down
to seventeen point nine and we're not actually the worst
off in the rats departments here in Canterbury. Over on

(02:06):
the most people in Westland are going to have their
local council rates go up by eighteen point six four percent,
in the regional council rates going up by twenty seven percent.
Now that's enough for numbers, because the danger when we're
talking about things like inflation is that we just start
going down the rabbit hole of percentage system percentage out
and the eyes start glazing over. But I needed to

(02:28):
mention those numbers. I needed to mention them because they're
relevant to what we're going to be talking about today,
which is this expectation from the Finance Minister that local
councils up and down the country start doing their bit
to bring inflation down to somewhere within that Reserve Bank
target of one to three percent. So here's my thinking
on this idea of local councils reducing costs to the

(02:51):
point that they actually do play a role in reducing inflation,
which is what the Finance Minister is calling for. And
here's why I don't think that's possible. And it's not
about the councils themselves. It's about us. It's about you.
It's about me, because it's you and me who expect

(03:12):
more and more from our local councils. It's you and
me who bang on about the council, you know, not
doing enough to clear the leaves from the garters during autumn.
It's you and me who when we see water pouring
out of what are broken drained somewhere, we want it
sorted straight away. It's you and me who want to
be able to go to the library day and night,
even though there might only be a handful of people
there when we turn up, but the lights are on,

(03:34):
the heaters are on staff for them, and we want
to go and get the book out when we want to.
It's you and me who expect our local councils to
be fixing the potholes and the roads and the cracks
and the foot paths. It's you and me who want
to be able to talk to someone at the council
twenty four to seven. I want my call arts at
at two in the morning. Is you know what I mean?

(03:54):
Until we start listening, and until we start understanding what
the Finance Minister is saying about local councils doing their
bit to cut costs and help bring in flashing down further,
we get it. Nothing's going to change. If we understand
what she's saying, we will stop criticizing our counsels from
the sidelines and realize that the Finance Minister is talking

(04:18):
to us, She's talking to you, she's talking to me,
just as much as she's talking to Film Major and
Dan Gordon and Sam Broughton and any other mayors and
councilors and council staff around the country. Because councils won't
have a hope and hell of tightening their budgets, cutting
their costs, trimming their budget and getting costs down as
long as we continue to expect and demand more, because

(04:41):
that's how things get expensive and that's why our rates
go up. So now I don't have any faith that
our local councils can do what the Finance Minister wants
because we won't let them with all our demands and expectations.

Speaker 1 (04:57):
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