‘Risky’ four well-beings Bill puts cart before the horse

Federated Farmers says a return to a looser legislative mandate for local government activities presents a "depressing scenario" for those who foot the bill - ratepayers.

Feds President Katie Milne fronted the Government Administration Select Committee this morning (SUBS, JULY 4) and said farmers were deeply concerned that proposed changes will act as an impetus for higher local government spending and rates.

The Local Government (Community Well-being Amendment) Bill also "puts the cart before the horse" because the Productivity Commission hasn’t yet started its local government inquiry.

"Park this Bill at least until the Commission has done the grunt work and sorted out the drivers of council spending and recommended how councils should be funded in future," Katie said.

Federated Farmers believed the vast majority of ratepayers favour the current purpose statement for local government, to provide good quality local infrastructure, local public services and legislative functions "…in a way that is most cost effective for households and businesses…".

The bill proposes a return to the so-called ‘four well-beings’ purpose, where local authorities "…promote the social, economic, environmental and cultural well-being of communities…", with no mention of cost-effectiveness.

The last time the four well-beings were in the Act, 2002-2012, local government annual rates revenue jumped 94%, when inflation was 28%.

"Since the removal of the four well-beings, growth in spending and rates have moderated significantly. This despite stronger population growth," Katie said.

"Despite some crazy ideas, like Rotorua’s infamous Mudtopia debacle, the signal from the Act’s current purpose statement has generally helped to focus council behaviour. However, in this year’s round of long-term plans we are starting to see some creep back; perhaps councils have been encouraged by the signals they are getting from government and this Bill."

The original "four well-beings" legislation also included a robust consultative regime. That’s missing in the current bill.

"With weak community engagement provisions and no relationship with funding, the re-insertion of the four well-beings is flawed and risky.

"Ratepayers cannot afford for us to go back to the out of control spending and rates increases of the 2002 to 2012 decade."

Katie referred to the Local Government Business Forum’s report on council funding, noting the growth in non-core vs core spending over recent years, and the concern this Bill will exacerbate this trend. To see the report, go to www.fixcouncilfunding.co.nz

ENDS

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