Cap on rates increases timely

Cap on rates increases timely

Rodney Hide's Bill that would cap local government rates increases by the rate of inflation plus a margin is a step in the right direction and deserves select committee examination Business NZ Chief Executive Simon Carlaw said today.

"The new Local Government and Rating legislation unleashes local Government to spend in any direction. While some of that expenditure may also include local implementation of central government policy that it suits central government to keep at arms length, there are now few effective checks and balances restraining increases in rates and user charges.

"Our only criticism is that Mr Hide's Bill is too generous. Too many councils are likely to treat any cap as the minimum and turn their attention on their user charges for monopoly services.

"A number of American states have to tax under different ceiling formulae, for example, Colorado which limits state spending increases to the rates of inflation and any population growth.

"These are the options that should be explored by a Select Committee. Aucklanders and others round New Zealand facing sharp rates increases should make sure their MPs refer the Bill on for detailed consideration."

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