Nick Smith: Nelson Mayor on the Government proposing to cap rates increases at 4% a year

There's an expectation a rates cap will prove challenging and require teaming up with central Government.  

The Government's proposing to stop rates increases at 4% a year, excluding water and other non-rates revenue. 

Councils wanting to go beyond this will need approval from a government-appointed regulator. 

Nelson Mayor Nick Smith told Mike Hosking he's not surprised councils have been targeted by the Government as it aims to reduce costs across the board. 

But he says delivery will require the Government to work with them to get costs down, especially in the construction sector. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
So the details on the rates cap are out. Implementation
still years away, of course, but consultation is as of
this morning apparently, and you'll rate limit of two to
four percent water excluded. Any council wanting to go above
four percent will need regulatory approval. Next Smith is the
mayor of Nelson and it's with us Nick, morning to you.

Speaker 2 (00:16):
Are you good morning, Mike?

Speaker 1 (00:17):
How doable?

Speaker 2 (00:19):
Oh, it's going to be challenging and it's certainly going
to require a real culture change within the local government sector.
About eighty percent of our costs are infrastructure and the
real driver if you look over rates going up over
the last three years, average across New Zealand is thirty
five percent. It is a bit of a shoka and
we shouldn't be surprised with the government having to make

(00:41):
a heap of hard decisions. You know, every government agency's
got to squeeze on them that that come after us
and are putting these caps in place. But if we're
going to be able to deliver them, they are going
to need to work with us around getting those costs,
particularly in the construction sector down. You get to things
likes of households would just be gobsmacked to know that

(01:04):
over the whole of New Zealand, we average spanning about
five hundred dollars per household on things like temporary traffic management,
things like areas likes of waste levees. Actually councils end
up paying a big part of those. So the only
way this plan is going to succeed is actually if
we engage with government and saying actually some of the
regulations that have been put in place, particularly over the

(01:26):
last decade are adding to those costs and if we
are going to be able to deliver on your two
to four percent, we need to work together to deliver it.

Speaker 1 (01:34):
Do you need every one of the years till twenty
twenty nine to make it work?

Speaker 2 (01:38):
Each council will be in a different position. We had
a big storm through in twenty two and I know
areas like gisbans and those and the fix up costs
for those those do take several years. To be fair
to the government that've given us an exemption in that area,
I think it's going to be a big stretch to
get there by twenty nine hour timetable. And my challenge

(02:00):
to our sector would be, hey, look, don't try and
fight the government. Work with them. They are simply reflecting
the frustration from New Zealanders that the sector's costs, which
is not uncommon for a monopoly sector, have not got
under control in the way that households and businesses have
had to change in response to the sort of post
COVID recession.

Speaker 1 (02:21):
Good stuff, mate, nice to catch up Nick Smith, who
is the mayor, of course, of Nelson. For more from
the Mic Asking Breakfast, listen live to news talks that'd
be from six am weekdays, or follow the podcast on iHeartRadio.