Perspective with Heather du Plessis-Allan: Are local councils competent enough to meet rate caps?

The Government has announced the details on its plan for rates caps - councils will be capped at 4%.
They will not be able to raise their rates by more than 4%, and the plan will start being implemented in a couple of years' time, sort of mid 27, and then will be fully in place by mid 2029.
There will be exemptions to the rate cap. The high growth councils will be exempt from the cap. Councils that experience a natural disaster, something like bad weather, a quake, whatever, they will be exempt. Councils that need to catch up on infrastructure underinvestment, which I thought would have been most councils, they will be exempt.
They will have to apply. The exempt will not be automatic. They will have to apply for an exemption, but those are the grounds they can apply on, which I think sounds like potentially a lot of councils who will be able to get around the 4% cap.
Now, on the politics of it, it is incredibly smart to announce this - it is incredibly popular. One poll found that about 75% of people want to see this happen, and I really want this to work.
I really want this to force councils to sharpen their pencils and start cutting out the nice to haves like the disco toilets and the bus stops with the gardens spouting from the top. And I want them to be able to be going through their staff list and maybe discover like Wellington has in the last week, about 330 people who probably don't need to be paid for by the ratepayer.
And this will definitely, I think, do that. It will force a bit of discipline.
But what does worry me is that this isn't dealing with the actual problem that we've got in local government, which is that we have a bunch of numpties sitting around the council tables making bad financial decisions.
After this, we will still have numpties sitting around the council table, and those numpties will still make bad financial decisions.
And if there's one thing that we've learned from recent experience with Wellington City Council, it's that when numpties cut spending, They cut spending on important things like pipes and for some weird reason they keep on spending on the dumb stuff like disco toilets, and I worry that that will happen around the country and we will simply end up with another crisis like we're having at the moment of deferred maintenance.
Having said that, It is obviously a much better situation if the numpties have less money to waste rather than more money to waste.
So on balance, the rates cap is probably an improvement on the status quo, isn't it?
Even if only for the certainty it gives the rest of us that our rates bill next year will not force us out of our homes.
In that respect, this has got to be good news.

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Episode Transcript

Speaker 1 (00:00):
Yep. So the rate gaps are being announced at the moment.
The government's just unveiled the details on this. Councils will
be capped at four percent, They will not be able
to raise their rates by more than four percent, and
the plan will start being implemented in a couple of
years time, sort of mid twenty seven, and then will
be fully in placed by mid twenty twenty nine. There
will be exemptions to the rate cap. The high growth

(00:20):
councils will be exempt from the cap. Councils that experience
a natural disaster to something like bad weather, equake, whatever,
they will be exempt. Councils that need to catch up
on infrastructure under investment, which I thought would have been
most councils, they will be exempt. They will have to apply.
The exempt will not be automatic. They will have to
apply for an exemption, but those are the grounds they

(00:41):
can apply on, which I think sounds like potentially a
lot of councils who will be able to get around
the four percent cap. Now, on the politics of it,
it is incredibly smart to announce this. It is incredibly popular.
One poll found that about seventy five percent to people
want to see this happen, and I really want this
to work. I really want this to force councils to
show up in their pencils and start cutting out the

(01:02):
nice to haves like the disco toilets and the bus
stops with the gardens spouting from the top. And I
want them to be to be going through their staff
list and maybe discover, like Wellington has in the last week,
about three hundred and thirty people who probably don't need
to be paid for by the rate payer. And this
will definitely, I think, do that it will force a
bit of discipline. But what does worry me is that

(01:23):
this isn't dealing with the actual problem that we've got
in local government, which is that we have a bunch
of numpty sitting around the council tables making bad financial decisions.
After this, we will still have numpty sitting around the
council table, and those numpties will still make bad financial decisions.
And if there's one thing that we've learned from recent
experience with Wellington City Council, it's that when numpties cut spending,

(01:43):
they cut spending on important things like pipes, and for
some weird reason, they keep on spending on the dumb
stuff like disco toilets, and I worry that that will
happen around the country and we will simply end up
with another crisis like we're having at the moment of
deferred maintenance. Having said that, it is obviously a much
better situation if the numpties have less money to waste

(02:03):
rather than more money to waste. So on balance, the
rates cap is probably an improvement on the status quo,
isn't it, even if only for the certainty it gives
the rest of us that our rates bill next year
will not force us out of our homes. In that respect,
this has got to be good news. For more from
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