Pay Less Rates Now: Pay More Later!

The government is suggesting that there should be a rates cap. Anyone watching local government knows how difficult raising rates is to do, politically. Mayors and councillors will cut comms, staff, office space, anything that is less visible (which included, in the past, water infrastructure because it is SO expensive) before they put rates up above 3%.

But water infrastructure must be improved. Amalgamation was on the table and then Three Waters was repealed. It has left a gaping budgetary hole. Putting in a rates cap does not help. It is going to cost significant sums to fix the pipes now but it will cost even more if kicked down the road.

Councils around the country will have set their rates as low as they can after doing a brutal slashing down of their work programme. For councils with very high infrastructure bills they will be selling assets, cutting down on events (but these drive the local economy so it is a balance). And the last thing you want with rising unemployment of young people is to shutter the rugby club and sell off the land.

I suspect National saw votes in rubbishing Three Waters and then discovered it was the best option. Government (a National one in this case) forced Auckland to amalgamate and set up Watercare which while imperfect has, through economies of scale and water charging, increased capacity and improved water infrastructure. Auckland has one of the lowest rates rises.

Smaller councils have been asking central government for help to deliver water infrastructure for 20 years - it simply costs too much for them to do properly. Labour picked up the chalice and did a good job with their amalgamations proposal but sold it badly.

Government suggesting councils reduce "nice to haves" is foolish. No one wants to lose pools, particularly as most schools no longer have them. We don't want to sell parks, many of which double as flood soakage and playing fields, or community centres with their playgroups and senior yoga, or economic investment in regional parks, museums or events that drive tourism and economic activity - and if we did, that will still not cover the cost of infrastructure in smaller areas.

Nick Smith said central government wastes more than local govt. He's right. Councils are forced to stick within their means and hold communities together (and attract talent). It is up to their voters to drive what this looks like. People on the ground are best placed to work out the least worst trade-offs.