Francesca Rudkin: What should councils be funding?

Yesterday the Prime Minister spoke at the Local Government NZ (LGNZ) conference, warning councils to restrain their spending to the basics or run the risk of having your hand forced by central government.   

Apparently, the remarks got a frosty reception – possibly because no one likes being told off and possibly because since Covid all some councils have been doing is going through their budgets line by line.   

Local Government Minister Simeon Brown backed up the Prime Ministers thoughts on the Mike Hosking Breakfast this morning.   

“The reality is, with an average 15% rate increase, our expectation is that councils get on with the work just like Government has had to do, go line by line, cut the waste, focus on the basics and ensure that they can pass those cost savings on to ratepayers at this cost of living crisis time. So, you know we're doing our part. We've also put in place Local Water Done Well, which gives councils far greater access financing for water infrastructure, that means they should be able to do that and reduce the cost burden on ratepayers.” 

Simeon Brown also said yesterday: “Council rates are increasing by around 15 per cent on average this year, which is more than four times the rate of inflation. This is unacceptable and councils must ensure they are doing everything they can to reduce pressure on ratepayers.”   

As difficult as it was to hear for some councils, it’s hard to argue with the sentiment, right?  Regardless of whether we’re tightening our belts after a global pandemic or not, we expect our councils to always be making sensible funding decisions. To focus on core council activities and maintain assets for the future.   

This week we also saw the released of a report into Local Government performance, that warned councils were not replacing ageing infrastructure to the extent they should be.  

Different councils around the country have different issues – but they have potential hefty rate rises in common and a need for central government to help fund infrastructure.   

If yesterday’s speech was anything to go by, then the time for handouts is over. Councils are about to negotiate their city deals with central government to line up funding, and this speech is a clear warning to some councils you might have to adjust your spending and your wish list.   

In regard to handing out cold hard cash to help councils, the Prime Minister made it very clear that the previous government might have taken that approach, but the party is over.   

Simeon Brown, inspired by the New South Wales model, has also floated the idea of putting in place a regulator, which regulates what price increases can be put on for non-core programmes that councils do. The aim of this is to maintain cost controls for councils, something which he believes we’re not currently seeing. Is this necessary? It feels a little too controlling – but you might feel your local council needs another layer of control.   

So, for cental government it’s all about rubbish, roads and water – and price caps.   

As a rate payer, this all sounds good – but we all have different ideas of what should be a core function of a council. Are libraries and sports fields and parks as important as rubbish, roads and water?  

What do you want to see your council spend money on? What are the priorities for you and what would you like dropped? 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:06):
You're listening to the Kerry Wood of Morning's podcast from
News Talk SEDB.

Speaker 2 (00:11):
Yesterday, the Prime Minister spoke at the Local Government New
Zealand Conference, warning councils to restrain their spending to the
basics or run the risk of having your hand forced
by central government. Apparently the remarks Scott a little bit
of a frosty reception, possibly because no one likes being
told off, and possibly because since COVID all some councils

(00:33):
have been doing is going through their budgets line by line.
Local Government Minister Simeon Brown he backed up the Prime
Minister's thoughts on Mike Hosking Breakfast this morning.

Speaker 3 (00:44):
The reality is with an average fifteen percent rate increase,
our expectation is that councils get on with the work,
just like government has had to do. Go line by line,
cut the waste, focus on the basics and ensure that
they can pass those cost savings onto ratepayers at this
cost of living crisis time, so you know we're doing
our part. We've also put in place Local Wood have
done well which gives councils far greater access financing for

(01:06):
water infrastructure. That means they should be able to do
that and reduce the boss burd and vopayers.

Speaker 2 (01:12):
Simeon Brown also said yesterday council rates are increasing by
around fifteen percent on average this year, which is more
than four times the rate of inflation. This is unacceptable
and councils must ensure they are doing everything they can
to reduce pressure on ratepayers. It is hard to argue
with the sentiment right regardless of whether we're tightening our

(01:33):
bouts after a global pandemic or not. We expect our
councils to always be making sensible funding decisions, to focus
on core council activities and maintain assets for the future.
This week we also saw the release of a report
into local government performance that warned councils that we're not

(01:54):
replacing aging infrastructure to the extent that they should be,
and of course that coincided with another huge water league
and Wellington. I do wonder actually how much of the
speech yesterday was aim at the Wellington Council. Different councils
around the country have different issues, but they have potentially
hefty rate rises in common and a need for central

(02:16):
government to help fund infrastructure. If yesterday's speak was anything
to go by, then the time for handouts is over,
so councils are about to negotiate their city deals with
central government to line up funding, and this speech is
a clear warning to some councils you might have to
adjust your spending and your wish list in regard to

(02:38):
how handing out cold cash two councils. The Prime Minister
made it very clear that previous the previous government might
have taken that approach, but the party is over. Sime
and Brown, inspired by New South Wales and a model
that they have there, has also floated the idea of
putting in place a regulator which regulates what price increases

(03:01):
can be put on the non core programs that councils do.
When the aim of this, of course is to main
cost controls for councils, something which he believes we're not
currently seeing. Is this necessary or is this just another
law of bureaucracy which means that nothing's actually ever going
to get done. And we've at some point you've got
a kind of trustee council to get things done. So

(03:25):
the outcome for central government is it's all about rubbish
and roads and water and price caps. As a rapepayer,
this all sounds great, but we all have different ideas
of what should be core functions of a council. Our
libraries and sport fields and parks as important to you

(03:46):
as rubbish and roads and water. What do you want
to see your council spend money on and what are
the priorities for you? And what would you like to
see dropped from where your council is spending money.

Speaker 1 (04:01):
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