Andrew Dickens: We don’t need rate caps, we need smarter councils

So the Local Government Conference is underway and the Government took advantage of it to talk down to councils like a stepdad telling off their stepson. 

They’ve been told to reign in wasteful spending to keep their rates increase down. It'd be good if the government that is currently spending more than any other ever practiced what they preached. 

But anyway, the Government is talking about bringing in rate caps.  

Sounds good. A simple idea we can all understand, but will it work? 

The fact is the idea is in place in Australia. Melbourne and Sydney have them, but individual councils can apply for exemptions. And in Melbourne it means that some councils have imposed 10% rates.  

But they don’t have them in Brisbane, and Brisbane has the lowest rate increases in Australia.  

So why is that?

Successive councils have kept the debt low. They’ve had smart long term plans with cross-party support.  

They have a suburbs first policy so that improvements are made where people actually live. 85% of their budget is spent on this - it’s also cheaper than grand projects.  

And they like public transport.  A record $210 million is being spent on it, which is a lot cheaper than building roads, roads, roads. Here public transport and alternative transport options are the first to be cut in hard times.  

And because of their resident friendly, suburban centric approach combined with fiscal prudence, they have some wriggle room. 

Senior citizens in Brisbane get the most generous rebates in the country, cutting their rates in half.  

And it means that Brisbane can pursue some big stuff like the Olympics. But there they show some balls as well, canning the re-development of the Gabba because the business case didn’t measure up. 

Rates caps are good slogan policy. 

It sounds like a simple answer to a complex situation, but they didn’t work in Sydney and Melbourne. 

In fact there they’re suffering from rates catch up. If you defer projects then eventually someone is going to pay for them.  

Whanganui will find that out in the future. Work on the Opera House has been deferred, saving $8 million, but that work hasn’t gone away and will cost more in the future. 

The reason we’re in the hole we’re in is false promises of rate cuts by previous councils that resulted in a rates catch up.  

Wellington’s water sound familiar. 

We don’t need rates caps, what we really need is sensible long term fiscally prudent governance. Look for that next election. 

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Episode Transcript

Speaker 1 (00:00):
So the local government conference is underway and yesterday the
government took advantage of it to talk down to councils
like a step dad telling off their step son. They've
been told to rain and wasteful spending to keep their
rates increases down. Now you know a bit of irony.
There would be good if the government that is currently
spending more than any other also practice what they preach.
But anyway, the government is now talking about bringing in

(00:22):
rate caps. Sounds good, simple idea we can all understand.
But would it work. The fact is the idea is
in place in Australia. Melbourne and Sydney have rate caps,
but individual councils can apply for exemptions. In a Melbourne
that meant that some councils imposed ten percent rates, so
it didn't work there. But they do not have rate
caps in Brisbane, and Brisbane has the lowest rate increases

(00:42):
in Australia. So why is that successive councils have kept
the debt low. They've had smart, long term plans with
cross party support, so that's one thing. They have a
Suburb's First policy, so that improvements have made where people
actually live. Eighty five percent of their budgets spent on this.
It's cheer than grand CBD projects, and they like public transport.

(01:04):
A record two hundred and ten million dollars is being
spent this year on it, which is a lot cheaper
they say, than building roads roads roads. But of course
here public transport or alternative transport options are the first
to be cut in hard times. We hate a cyc
away and because of their resident friendly, suburban centric approach,
combined with a fiscal prudence, they have some regal room.

(01:24):
Senior citizens in Brisbane get the most generous rebates in
the country, cutting their rates in half, and then Brisbane
can pursue some big stuff. They're going for the Olympics,
but here they show some balls as well, conning the
redevelopment of the Gabba because the business case didn't measure
up rate. Caps are good slogan policy. It sounds like
a simple answer to a complex situation, but they didn't

(01:46):
work in Sydney and Melbourne. In fact, they're suffering from
what's called rapes catch up. If you defer projects, then
eventually you're going to have to do them, and someone's
going to pay for them. Fung I know we will
find that out when the Opera House will eventually have
to have millions spent on it to fix it up.
They've deferred that the reason we're in the hole is
because of false promises of low rates by previous mayors

(02:08):
and councils that has resulted in a rates catch up
Wellington Water. Does that sound familiar to you. That's exactly
what happened there. We don't actually need rate caps, but
what we really need is sensible, long term, fiscally prudent governance.
Look for that next election, but it's as rare as
a unicorn. For more from Early Edition with Ryan Bridge.

(02:28):
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