MEDIA RELEASE 28 May 2009Â

Statement from David Thornton.

Budget Puts Pressure On Local Councils To Hold Rates.

Increases must be kept to 2% maximum.

The grim economic picture painted in the Budget must cause local councils to re-examine their own draft budgets and keep rates increases at or below the cost of living index.

Many urban households will include someone being made redundant, or reduced income from fewer working hours.

Superannuation inflation increases will not cover any increase in council rates and superannuitants will be unable to pay

Rural ratepayers, in particular dairy farmers, already unfairly rated, will be hard-pressed to meet rates increase following the signfiicant reduction in milk payments.

And businesses, under pressure from other costs, will be unlikely to invest in expansion if they see spendthrift councils wasting rates income in unproductive adventures.

Councils are now finalising their plans for the next 10 years and they must all face the harsh reality that their ratepayers do not have bottomless purses.

No council should adopt rates increases above 2% - and if they do the Government should step in and legislate rates capping as a matter of urgency.

Ratepayers in the Auckland region are particularly at risk with the costs of re-organisation likely to bite in the next two or three years before benefits start to accrue.

The onus on councils is to be ruthless in eliminating waste and resisting the temptation to start new projects of dubious value to the community.

All councils must finalise their budgets by 30th June,

ends

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