The cap is 4%, unless there are exceptional circumstances.
Of all the price pressures that are out of control, rates would have to be the worst.
As we have heard this week, insurance is starting to curtail, if not fall, in some areas.
Power is actually falling for commercial users, although not to what it should be. Certainly, the cost of generation is down and once the build out of solar and wind is complete there can be no excuse not to see prices drop domestically.
Food is back down within the Reserve Bank band. 1.9% was your last reading.
Petrol is all over the place but beyond our control, which basically leaves rates.
Look at the last inflation read and look at the part that rates played in driving it up. And the difference between rates and all the other examples I have just given is there is no sign of it ever ending.
Oh they have excuses! "There is no shortage of jobs to be done." And even if you strip out the frippery, the nice-to-have nonsense, the multi-cultural nods to Lord-knows-what, you are still left with genuine and real tasks that need attending to.
But the reason those jobs are so overdue and urgent is because they were never done in the first place because the frippery always took precedence, and it took precedence because it got headlines and they knew the ratepayer was a never-ending pot of money.
Well, no more.
What makes it tricky of course is councils will have to fund work through debt. The trouble is for too many they are tapped out.
They drained that well, as well. So in a purely numeric way they are between a rock and a hard place. But then they have no one to blame but themselves.
They will hope Labour wins the election of course, because Labour will open the tap up.
Which leads to the question, if Labour let councils charge bed taxes and let them charge whatever rates they want, is that a broken promise given they said there is only one new tax?
Anyway, 4% is restraint and reality and fiscal discipline.
Not a moment too soon.
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
Power is actually falling for commercial users, although not to what it should be. Certainly, the cost of generation is down and once the build out of solar and wind is complete there can be no excuse not to see prices drop domestically.
Food is back down within the Reserve Bank band. 1.9% was your last reading.
Petrol is all over the place but beyond our control, which basically leaves rates.
Look at the last inflation read and look at the part that rates played in driving it up. And the difference between rates and all the other examples I have just given is there is no sign of it ever ending.
Oh they have excuses! "There is no shortage of jobs to be done." And even if you strip out the frippery, the nice-to-have nonsense, the multi-cultural nods to Lord-knows-what, you are still left with genuine and real tasks that need attending to.
But the reason those jobs are so overdue and urgent is because they were never done in the first place because the frippery always took precedence, and it took precedence because it got headlines and they knew the ratepayer was a never-ending pot of money.
Well, no more.
What makes it tricky of course is councils will have to fund work through debt. The trouble is for too many they are tapped out.
They drained that well, as well. So in a purely numeric way they are between a rock and a hard place. But then they have no one to blame but themselves.
They will hope Labour wins the election of course, because Labour will open the tap up.
Which leads to the question, if Labour let councils charge bed taxes and let them charge whatever rates they want, is that a broken promise given they said there is only one new tax?
Anyway, 4% is restraint and reality and fiscal discipline.
Not a moment too soon.
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
7 comments:
Councils love to get involved as 'property developers' and usually blow it.
There always long suffering ratepayers to pick up the pieces.
Stick to core services.
Like this...
https://www.nzherald.co.nz/rotorua-daily-post/news/rotorua-lakes-council-rejects-probe-into-how-70m-of-projects-entered-long-term-plans/EETNA6XKYBFNVFTYXIU4G7MG3Y/
Indeed not a moment too soon to remove the right of councils to extort whatever amount they fancy from their captive audience regardless, it seems, of any election promises their members made.
However, how is the 4% level justified when our Reserve Bank is required to aim for an inflation band between 1% and 3%? The basic problem, that rates will steadily increase relative to inflation, is not addressed. The result is that home owners who went without to pay off their properties become increasingly like rental tenants in their own homes. Those who cannot increase income, such as pensioners, eventually cannot afford to remain in the homes they own. That is a ridiculous and unacceptable situation.
In my opinion, councils should be prevented from increasing rates beyond inflation unless authorised to do so through a referendum for a specific expense. Even in that case, people who have no realistic way of increasing their income should be protected from any rise above inflation.
I may have missed it, but you haven't given text to Councils' "vanity projects". The extent of them is almost legendary, and too many to mention individually, but readers will be well aware of them in their locality.
A rates cap fails to address the reality that the level of expenditure is often outside the control of council staff. Pay equity springs to mind. Energy prices are another. What happens when the street lights go out because a council can't pay for power prices that peak in a dry spell? Or when they can't afford to put fuel in their rubbish trucks next time Donald Trump forces the price of diesel through the roof?
And a rates cap won't stop councillors from promoting populist or vanity projects. The handful of folk who actually bother to vote have not shown much interest in reining in these profligate spenders in the past. Why should they change their behaviour just because of a rates cap? All that will happen is that other essential council spending will have to be cut back to keep rates under the 4% cap.
So why on earth doesn't this Government cut to the chase and amend the Local Government Act to define exactly what they consider to be the core responsibilities of territorial authorities. Fixing potholes or giving free concerts in the park? Seems like a no-brainer to me. The logical corollary would then be for rates income to be applied only to funding those core responsibilities. Anything else would need be funded on a transparent user-pays basis or in the case of capital works, by borrowing.
On the bright side, at least water has now been taken away from the pollies who decided years ago that a problem underground is a problem that can be ignored.
Jonsey raises some very good points. I would suggest that the relevant point is to define core responsibilities.
Anon 10.25, why is it a ridiculous and unacceptable situation that people cant afford to live in their own houses? If you are one of these people that voted for your local council and they mismanaged funds due to general incompetence and dumb stuff such as rainbow crossings, rainbow toilets, hundreds of millions of dollars on bike lanes that no one uses, then I have a bit of sympathy, especially if you didn't vote for the previous incompetent mayor and candidates. however my sympathy is shallow, as a lot of people wanted higher rates ....and bike lanes and rainbow toilets etc. They must have, they voted them in.
I told people this would happen. It's now happened. And now people are whining about it. I actually find it quite amusing.
Heres an idea, if you want to be able to afford to live in your own house vote for competence. It's simple.
Agree with Jones - council’ scope needs tightening up through legislation. Far too many fringe activities, far too much activism and far too little demand for accountability by us, the voters.
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