John MacDonald: Capping council rates isn't a solution

Christchurch Mayor Phil Mauger is in campaign mode for this year’s elections, saying that he thinks the Government might be onto a winner with its idea of forcing councils to put a cap on rates increases.  

I’m wondering if Phil does actually think it’s a good idea, or whether he’s just saying it. 

Because I think it would create havoc for local councils having Wellington telling them how much they could increase rates each year.    

And this isn’t me banging the local democracy drum. This is me taking a commonsense view of things. Something you can’t always credit politicians for – whether they’re in central or local government.  

This idea that Prime Minister Christopher Luxon has been talking about in the last 24 hours doesn’t fall into the commonsense category.  

Because yes, every time I see my rates bills I think, “that’s a truckload of money”. And like you probably do as well, I wonder where it all goes.  

But that's what we elect local councils for. We elect them to run the outfit and make the decisions and decide how much they need to charge us ratepayers to pay for it all.  

And we have to like it or like it. Pretty hard to lump it. 

Which is why it’s very tempting for politicians to bang on about keeping rates down and focusing on the basics. But here’s where all that talk falls over and here’s why it’s nonsense for the Government to think it can tell councils how much more to charge ratepayers each year. And here’s why Phil Mauger is wrong to say that it’s a good idea. 

First of all: we’re part of the problem. Because even though we don't want to pay more rates, we want more from our local council.  

We want libraries staying open later. We want footpaths fixed as soon as we see them start to crack. We want roads fixed, but we don’t want road cones. We want the council to lend us money for community projects but then, when the rubber hits the road, we cry poor and say we can’t afford to pay the interest.  

We want, want, want. And that means one of two things: either the council saying no or the politicians saying yes, because they think it’ll get them re-elected.  

The other major issue is the whole funding structure for local government.  

Which is why I think the Government is taking a very narrow approach here. How on earth the Government thinks it could put a cap on annual rates increases without looking at the wider issue, I don't know.  

And that wider issue is the fact that local councils are being asked to do more and more under their own steam, without any extra funding to make it happen. 

Example: the Government wants more tourists coming here, but what about the infrastructure needed to support that growth? The Government doesn’t pay for that. Local councils do.  

And the way things are structured at the moment, pretty much the only way they get the money they need to do all the things the Government and us ratepayers want them to do, is to charge rates. 

And the more we and the government want the councils to do, the more rates we have to pay.  

That’s why this talk from the Government about councils needing to manage their finances better is such nonsense. And Phil Mauger needs to see that too.  

He thinks a rates cap could be a way of forcing the city council to look at the way it spends money, saying: “I’m open to it. I’m not saying it’s the best thing since sliced bread but I’m certainly open to looking at it. I want rates to be as low as they can.” 

Phil, the only way that’s going to happen isn’t the Government putting a lid on rates increases. The only way that's going to happen is councils stopping themselves kicking cans down the road and not spending money.  

We see it time and time again. Councils go for the stuff people can see and ignore the stuff people can’t see. Unsexy stuff like water pipes and sewerage pipes.  

They ignore them so well that, one day, it all goes pear-shaped and suddenly they're facing a gazillion-dollar upgrade. And how do they pay for that? What's the only way they can pay for that?  

Increased rates. 

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Mornings podcast with John McDonald
from News Talk.

Speaker 2 (00:11):
ZB Christish Mayor film major he's in campaign mode for
this year's elections, saying today it's very obvious that he's
in campaign mode, saying today that he thinks the government
might be on to a winner, whether it's idea of
forcing councils to put a cap on rates increases. Now

(00:32):
I'm wondering if Phil does actually think it is a
good idea or whether it's just saying it, because I
think it would create havoc for local councils, having Wellington
telling them how much they could increase rates each year.
And this isn't me banging on about local democracy. I'm
not banging that drum today. This is me taking a

(00:53):
common sense view of things, something you can't always credit
politicians for, whether they're in central government or whether they're
in local government. And this idea that Prime Minister Christoph
Luxon has been talking about in the last twenty four
it does not fall into the common sense category because
I mean, yes, every time I see my rates bills,

(01:14):
I think cheapest, that's a truckload of money, and like
you probably do, I wonder where it all goes at times.
But that's what we elect local councils for. We elect
them to run the outfort. We elect them to make
the decisions and decide how much they need to charge
us rate payers to pay for it all, don't we

(01:35):
And we have to like it or we have to
like it. It's pretty hard to lump it, which is
why it's very tempting for politicians to bang on about
keeping rates down and focusing on the basics and all
of that. All of that nonsense. It is just nonsense
because here's where all that talk falls over. And here's

(01:55):
why it's nonsense for the government to think it can
tell councils how much more to charge rate payers each year.
And here's why Film Major is wrong to say, oh,
it could be a good idea. Wrong, they're all wrong.
First of all, we are part of the problem because
even though we don't want to pay more rates, we

(02:15):
still want more from our local council, don't we. Whether
it's christ chur at Selwyn Hudnui won't make it Eadie
wherever you are. You know, we want the library staying
open later, We want the footpaths fixed as soon as
we see our little cracks start to emerge. We want
the roads fixed, but we don't want the bloody road cones.
We want the council. We want the council to lend
us money for community projects. And then when the rubber

(02:38):
hits the road, we cry poor and say on we
can't actually we can't afford to pay the interest, or
actually we can't afford to pay you back. Then why
should we We want want want And that means one
of two things, either the council saying no or the
politicians saying yes because they think it'll get them re elected.

(03:01):
And the other major issue is the whole funding structure
for local government, which is why I think the government's
taking a very narrow approach here. I mean, how on
earth the government thinks it could put a cap on
annual rates increases without looking at the wider issue. I
don't know, probably because it's easy and it's popular to
talk about rates camps. And the wider issue is the

(03:21):
fact that local councils are being asked to do more
and more under their own steam without extra funding coming
to make it happen. Example, here's a very current example.
The government wants more tourists coming here who wouldn't. But
what about the infrastructure needed to support that growth. The
government doesn't pay for that local councils do. Councils like

(03:45):
the West Coast not many rate payers, a lot of
infrastructure to pay for though, and the way things are
structured at the moment, pretty much the only way these
councils get the money they need to do all the
things that the government wants them to do, and all
the things that we want them to do. Only way
to get money in the door is to charge rates.
And the more we and the government want the councils

(04:07):
to do, the more rates we have to pay. That's
why this talk from the government about councils needing to
manage their finances better, it's light of odd nonsense. And
Phil Major needs to see that too. Oh and he's
saying today, quote, you've got to look at every option.
He's saying a rates cap could be a way of
forcing the city council, for example, when he runs, could
be a way of forcing the city council to look

(04:27):
at the way it spends money. Quite I'm open to it.
I'm not saying it's the best thing since slice bread,
but I'm certainly open to looking at it. I want
rates to be as low as they can will fill.
The only way that that's going to happen isn't the
government putting a lid on rates increases. The only way
that's going to happen is councils stopping themselves kicking cans
down the road and spending money when it needs to

(04:50):
be spent. I mean, we see a time and time again,
don't we. You know, councils go for the stuff people
can see, and they ignore the stuff we can't see.
Unsexy stuff like order pipes, sewerage pipes, not very sexy,
and they ignore those things. And then one day WHOI
or goes pear shaped and suddenly they're facing a gazillion

(05:10):
dollar upgrade. And how do they pay for that? What's
the only way they can pay for that increased rates?
Accept it. So, as far as I'm concerned, the government
is wrong thinking that rates caps are the answer, and
Phil Major is wrong thinking that it could be a
good idea.

Speaker 1 (05:30):
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