These have been raised by Laurence Slee, a highly qualified consultant who works extensively in areas such as public sector and civil service reform.
Mr Slee asks “what, if anything, the National Government intends to do to improve accountability of what now accounts for a significant proportion of the New Zealand economy.” His questions concern rates increases many times the rate of annual inflation, performance benchmarking, Council policy and governance.
Question 1 Overall rates:
When inflation is less than 1% and national average wage increases are only 2.6%, does central government consider it acceptable that Auckland Council should be even proposing increasing average rates levels by as much as 11.4% (in Albert – Eden Ward, before additional new user pays charges for refuse collection and a possible targeted transport rate, and the inclusion of additional increases proposed that are beyond Council authority1)? If it is considered unacceptable, what can central government do to curb the excess, and by when?
Question 2 Performance Benchmarking
We have received verbal indications that Auckland Council has the 3rd highest level of rates in New Zealand. Not all of this can be attributed to the need to invest in additional infrastructure. We were informed at the time of the last Local Government Amendment Bill that all Councils’ performances would be benchmarked (sometimes called league tables or similar names). We are aware of 2 unofficial, private and independently produced sets of such tables. What progress has been made of producing official inter-Council comparisons and when will results be made publicly available?
Question 3 Council Policy
Given that Auckland Council directly or indirectly subsidizes such facilities or services as a Super Yacht Facility, a loss making film studio; a marina village and business training, does central government consider Auckland Council to be in breach of its own rating policy2 that states that general rates are to be used to fund “public good” activities (which these are clearly not) or its principle of affordability?3 If Council is in breach of its own policies, and also puts private sector business training organizations at a competitive disadvantage because their operations are not subsidized, then what action will government take to ensure that ratepayers will not be expected to subsidize specific activities that fall outside the definition of “public good” i.e. all citizens have equal access?
Question 4 Governance.
Auckland Council proposes a 2015/16 budget of $555.6 million budget for “Governance and Support”. The only stated performance measures for this4 are that “(i) 50% of residents feel they can participate in5 Council decision making; (ii) 50% of Maori feel the same; (iii) zero complaints regarding Council processes upheld by the Ombudsman or Auditor General; (iv) 80% of Maori organizations feel they have an appropriate ‘working relationship’ (which has no definition of outcomes provided); (v) there are 19 ‘formalized relationships’ (again not defined in terms of outcomes) between Council and mana whenua”.
Only 1 of these performance standards is expected to improve (marginally) over the next 10 years, but expenditure increases progressively to $612.4 million.
In the absence of more clearly defined expenditure allocations, then based on a mathematical average, each of these 5 deliverables will cost $111.12 million per annum (or $5.94 million per annum for each “formalized relationship”.
Does central government or the Office of the Auditor General consider that this represents value for money? If not, what does central government propose to do in order to introduce an improved focus on results and outcomes that indicate value that is delivered? When will this be finalized?
1 Such as a further 1% on rates and a fuel tax of 1.2 cents/litre, or a $2 motorway toll.
2 Supporting Information for Consultation Document, 10 Year Budget, page 9-5
3 Supporting Information for Consultation Document, 10 Year Budget, page 9-3
4 Supporting Information for Consultation Document, 10 Year Budget, page 5-49/50
"There is increasing evidence that the Auckland Council structures developed at a national level are resulting in a lack of transparency at a local level. Ratepayers and, anecdotally, Councillors, find it difficult to obtain answers to queries either from the Mayor’s office or from Council officials. Local Boards express dissatisfaction with Council, but are sensitive to offending “the centre” for fear of losing funding.
The pattern of rates collections is hugely distorted. Whereas national taxation is progressive and equally distributed, based on ability to pay, Council residential rates do not reflect such a basis. The average residential rates for a property in Orakei is $3,682 compared to only $1,556 in Otara – Papatoetoe, (or $1,035 in Great Barrier). This has no correlation with ability to pay."
Quite right. Councillors are being asked to make decisions without having all the relevant information before them. Ratepayers can't get answers even through the official information act. Democracy, transparency and accountability are all but gone. Sadly, some local boards follow the Mayor's example.
I have been calling for government intervention for some time. Auckland is the powerhouse of the economy: if it goes bankrupt so will the country.