Mayor Len Brown, who promised to hold rates to 2.5 per cent this term, would not answer questions directly about the possibility of a 5.5 per cent rates hike this year and debt rising by $1.7 billion to $12.5 billion by 2025.
Once upon a time it was easy to answer that question. Rates were to provide for local infrastructure such as roads, and local services such as parks, waste collection and libraries.
Then along came the Clark Labour governments. They devised the hapless Local Government Act 2002. This introduced a whole new level of Socialist redistributive culture into Local Government by establishing the purpose of Local Government as providing for four wellbeings (environmental, economic, cultural and social). This allowed rates to be diverted into burgeoning bureaucracies of community development to deal with the social engineering so beloved of left wing politicians.
These highly subjective ‘wellbeings’ were an excuse to hive off government responsibility from the taxpayer to the ratepayer. It was redistributive in intent. The ever dwindling number of ‘rich’ homeowners could be made to pay all the cost of traditional local services and additionally pick up the taxpayers share of some social services. No additional funding for local government came for central government.
The rot set in. Rate rises started to go through the roof to pay for ‘the special consultative procedures’ and ‘community development’. New and burgeoning bureaucracies expanded to meet the socially engineered ‘need’ and have continued to escalate ever since. For many, especially those on fixed incomes, their rates bill is the biggest tax they face. Rates are forcing the elderly out of their homes in droves to make way for wealthy yuppies or property investors. Home ownership is dropping like a stone.
Not surprisingly renting has become the preferred way of life for today’s wealthy inner city elites, a disproportionately high number of whom are Greens and Socialists as we see from the General Election results. They work in central government sectors such as education, local government, or the legal profession. They earn high taxpayer and ratepayer funded salaries, do not pay rates or property maintenance and do not own cars. In short they do not contribute to local infrastructure, parks, waste collection, libraries or public transport and roads. Yet this wealthy new elite are the most vociferous and demanding when it comes to wanting ratepayers to pay for their chosen lifestyle.
This is understandable. Who wouldn’t you want to get someone else to pay for your lifestyle choices if you can get away with it. But is it just or equitable? No, of course it isn’t. Not surprisingly when National came to power it has tried, belatedly, to bring an element of financial responsibility into the local government by changing the purpose of the Local Government Act. They’ve got rid of the Socialist four wellbeings and introduced the purpose as “to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.”
The Mayor of Auckland should be sacked for not meeting the purpose of the amended Local Government Act in his proposed Long Term Plan. According to today’s Herald the increase in rates will be 7.6%pa when inflation is less than 1%pa. Despite these outrageous rises debt must increase astronomically. Why? Because there are simply not enough ratepayers to pay. He’s like Nero of old fiddling while Auckland turns into the ‘World’s Most Unaffordable City’.
There are two possibilities for how this will end, statutory management or a move to a more equitable way of paying for local government such as a local sales tax so that everyone contributes. Auckland has been set up to be a Socialist Empire forever, whether it’s this imbecile sleezeball of an Emperor or his successor. They will all be profligate and careless about being ‘cost effective’ when two thirds of the votes come from those who don’t contribute a cent. It’s time for the National Government to send in the troops, and bring some ‘cost effectiveness’ into local government by rethinking how money is to be raised and managed to pay for local services. They might even consider the proposition that there is no need at all for local government in a country of less than $5 million.
One thing is for sure. The current position is untenable.