A feature of the election so far, from all parties, has been silence on the ever-rising property rates across New Zealand.
Closer to home, this year’s increases have seen the region have the highest rate rise anywhere – South Wairarapa District Council’s 19.8 per cent hike took out the prize that no one wanted to win. While Carterton and Masterton rate rises were both less than 7 per cent, rate hikes everywhere have put local authority spending under the microscope.
It’s no secret that the big-ticket items for local government are water, roading, and salaries. As climate change brings increasingly severe weather to our shores, already creaking infrastructure has come under more pressure. Flooding in Auckland, Hawke’s Bay, and in our back yard of Tīnui means councils are the first line of defence [and the first chequebook] when disaster strikes.
Of course, central government funding is available in large-scale disasters. We have seen this with Cyclone Gabrielle, as local and central government worked together to deal with what the weather crashed down on us. However, much damage to roading and other infrastructure is incremental, and while a big storm might weaken a structure or road, it is often the months of wear and tear that breaks the very same structure or road.
At this point, local authorities must open their wallets. Wallets that are increasingly lighter and, in some cases, completely empty.
Earlier this year, an independent panel published a report on the future of local government. One of its key observations was that many councils have reached peak rates, which means ratepayers can simply not afford to pay much more.
The report recommended an injection of a billion dollars a year into local authorities from central government. It also recommended crown properties start paying rates; something they do not currently do. If these recommendations became a reality, the extra cash would go a long way towards mitigating the immense pressure on local government.
However, as the election campaign develops, not one party has put rating reform on the agenda. While tax reform has taken centre stage, with seemingly a new sweetener from somewhere almost every day, there has been only silence on rates.
It’s hard to know why this is. Many ratepayers are pensioners or others on fixed incomes who would welcome rates relief. Do the parties think the current rating system is fair, with ratepayers forking out more and more every time there is a major flood or storm?
The independent review panel chairman Jim Palmer said local government needs to be strong to build community resilience and strong local democracies.
“Currently, local communities are not well served by the relationship between local government and central government and a reset in that relationship is required. Our communities must be empowered to develop local solutions with more support and funding from central government,” the report said. No argument from me. However, there is no guarantee councils will lift their game, either.
It would be interesting to know what each political party thinks about the issues raised in the report. While rates might not have the same headline appeal as health, education or tax, the issue affects every single household in the same way.
