Simon Watts: Local Government Minister on the Government setting caps on council rates increases

An assurance a council rates cap will only target unnecessary costs, not community services or infrastructure. 

By 2029, councils wanting to increase rates by more than 4% will need approval from a government-appointed regulator.  

Water rates are excluded from the cap. 

Local Government Minister Simon Watts told Mike Hosking this will be an education process for councils. 

He says there's a lot of fat in the system and councils need to ensure cash has to be going into essential areas.  

Watts says he will work with the industry, not against them. 

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Episode Transcript

Speaker 1 (00:00):
This rates cap two to four percent. Right water is separate.
It's about getting back to basics. The law doesn't actually
come in, as we've said, till twenty twenty nine, but
the attitude is expected to be adjusted immediately. Simon Watts
is your Minister for Local Government is back with us.
Good morning, Yeah, great to be here, Miry. Wayne Brown
already says it isn't going to work. I suspect there
are other mayors who think the same way. How are
you going to deal with that?

Speaker 2 (00:21):
Look, we're going to be having conversation with Wayne. We've
got to know. The process is open for consultation. I
think Auckland had already signaled that they were looking at
keeping their rates within a pretty tight band as we
go into the Alder years. That may has been pretty
keen on making sure that spending was under control for
rate payers. So I'm confident we can work through that
detail with them. We've set a band, Mike, and I

(00:42):
think that's important to recognize a low point on that
based on inflation up a point on economic growth. That
band is a clear signal to councils And the reason
why we're doing it is because these guys are monopolies
and there's no riverbanks, no guardrails around what they've been
doing on rates, and some of it has been pretty
horrific in terms of a part the country a sense.

Speaker 1 (01:01):
And I think most people will be on board with you.
But I was watching your press conference yesterday and you
said in the messages it starts now. It doesn't come
until twenty nine, but the attitude starts today. I would
suggest to you they're going to give you the middle finger.

Speaker 2 (01:14):
Yeah, but look, you know, and that may be the case,
but my job is to make sure that I'm representing
the views that I'm hearing from ratepayers who are taxpayers
and they are sick and tired of seeing their money.
And as I said, these are monopolies being spent in
some pretty silly places and at excessive levels. And you know,
this has hit as hard as we know to supernuit.

(01:35):
It's hard to fix income and we've been practically the
policy is a band. It takes them. It's not the
New South Wales model. We've learnt from that. We've got
mechanisms to deal with your natural disasters and all of that.
So I think we've we've got the point right and
it'll be staged in as well, and over that process,
you know, we'll work with them. But actually, in fairness,

(01:56):
you know, I think I've had a lot of good
feedback from ratepayers across the tree overnight. Mike have said,
you know, well done. You know, at last someone's coming
in with a little bit of sense of control.

Speaker 1 (02:07):
Do you think people can get their head around you?
Once again, watching that press conference yesterday, the media questions
were instructed by thought in the sense all they were
worried about was libraries and parks, which is not what
you're saying. You're not talking about library and parks, You're
talking about wastage. So do we not the councils understand
wastage as opposed to libraries and parks, or it's going
to become a scrap.

Speaker 2 (02:26):
Well, look, part of this is an education process. But
we are not capping infrastructure. We're capping inefficiencies, right, and
that's the whole problem. We've got a lot of fact
in the system, and we need to make sure that
that finite amount of money ratepayers aren't a bottomless pit.
We know that, and you know, we've got to make
sure that that cash is going into the areas it's needed.

(02:47):
We're doing some other changes around, you know, making sure
that councils are focused on the basics. It's all part
of that package. But I'm confident I'll work with the industry,
not against them. But at the end of the day,
you know, I work for the ratepayer and this is
what they been calling.

Speaker 1 (03:00):
For, right. I appreciate Simon Watson, Minister for Local Government.
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