MEDIA RELEASE 28 August 2007

Statement from David Thornton.

RATES INQUIRY REPORT SUPPORTS RATEPAYERS CONCERNS BUT SOME PROBLEMS REMAIN.

CHANGES NEEDED URGENTLY FROM NEWLY ELECTED COUNCILLORS.

I welcome the report of the Rates Inquiry which has obviously taken on board many of the ideas and concerns put forward by NoMoreRates supporters and ratepayers generally over the last few years.

I also welcome the clear message the report gives to local councils that they need to be much more diligent in reaching their spending decisions and that all expenditure needs to be critically examined before funds are committed.

One alarming item in the report is the conclusion that expenditure forecasts in councils 10-year Long Term plans [LTCCPs] are probably understated.

This could be bad news for ratepayers unless some of the recommendations for alternative funding sources are introduced as quickly as possible.

The Inquiry has produced a very wide-ranging set of recommendations which include putting the onus on central government to provide more infrastructure funding.

Following the forthcoming local elections new councils will need to move swiftly to pressurise the government to make new funds available in the shortest possible time.

The statement that the current rating system will not be sustainable in ten years is a real wake up call to councils that they must put their houses in order and look for and implement a whole variety of alternative funding methods.

Recommendations for an International Visitors Environmental Levy and further increases in the Fuel Tax may upset some business sectors but such measures are necessary if the rates burden is to be lifted from residential ratepayers on low and fixed incomes.

While welcoming the general thrust of the report I am sorry to see that the Inquiry Team failed to deal adequately with the real problem which is the inequity of a property tax which ignores the vital ‘ability to pay’ factor.

The recommendations for changes to the valuation system may provide a medium term band-aid but the central issue of ability to pay remains a problem.

There should be some relief if rates as a percentage of total council revenue are reduced to 50% from the present 57% with increased user charges taking up a higher proportion than at present.

The report is a long and sometimes complex document and it is unfortunate that the government is not offering any comment on the recommendations despite having had the document for almost a month.

One thing is crystal clear –major changes are needed and, after the local elections, newly elected councillors will have a major job ahead of them putting right the mistakes of the past highlighted in the report.

ENDS

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