Wasteful Councils Should Beware

Local Government Minister Rodney Hide respond’s to Brian Rudman in today’s NZ Herald

Wasteful spenders of public money in local government should be feeling scared. I’m sure columnist Brian Rudman would agree with that – especially in these difficult economic times, when prudence should take absolute priority over excess.

He and I generally agree with those leaders of local government in New Zealand who believe that the desire to further community wishlists should be tempered with recognition that ratepayers’ purses are not an endless money tree.

I have to say in response to the November 26 headline “Hide and local government a scary mix” that the heading was absolutely correct as it applies to rooting out those practices that lead to needless expenditure.

John Key said it well: “We want to work closely with the local government sector because, on many issues, central and local government are in the same boat. What we do matters in people’s lives.”

Both central and local government are faced with a need to prioritise carefully what we do. Central government needs to face up to the cost of the obligations it has foisted on local government over the past decade. Local government needs to look closely at the need for expenditure outside its core areas.

In difficult and volatile economic times – such as those we are now experiencing – there are always fresh schemes coming forward with a veneer of public good attached to them that can lead councils into risky areas of investment.

For example: should a ratepayer organisation be involved in any way in the financial arrangements for a visit by a US football team?

Ratepayers are rightly sensitive to increases in what they are required to pay out to councils at regional and territorial level. Too many people on fixed incomes are finding rate demands difficult to meet. The value of their property may have soared in recent boom years, but their ability to service the resulting increase in rates has not.

Central government has listened to the pleas for tax relief.

Local government must take on board that relief from rating increases above the level of inflation are over. I will not be apologising for keeping pressure on in this area.

It does mean that, at times, there will be robust debate around councils’ selection of what they wish to spend ratepayers’ money on.

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One Response to “Wasteful Councils Should Beware”

  1. Sally Says:

    I posted this on the ODT site yesterday

    I live in hope that Mr Hide is able to do something about the profligate spending of councils. But as long as we have entrenched councillors with their “learned behaviour” as Far North Mayor Wayne Brown recently said, I doubt that things will change very much, until it is much too late. We may have already reached that point. Only time will tell.

    The Local Government Act 2002 makes it mandatory to treat equally the “four well-beings” – social, environmental, cultural and economic. This is a ridiculous principle, as a vast number of people have found to their amazement with the credit crunch. They did not realise how important it was to live within their financial means. Something councils are surely going to have to face up too.

    Councils are also meant to take into account the reasonably foreseeable needs of future generations. The recent escalation of debt by the majority of councils proves that those in power have completely ignored this principle. They have tightened the noose even further around the productive sector, as those on low incomes will be perceived as not having the ability to pay.

    The unbridled powers given to Chief Executives must also be curbed. CEOs at the end of the day are only employees, not owners.

    Consultation is meaningless and a costly joke for ratepayers as it is a rarity for a project or policy to be overturned. The powers that be have already made up their minds and usually nothing will change their minds.

    I have doubts about legislation being adopted to rein in council spending. Perhaps it would more effective to educate the public on the legal implications for a councillor. It is my understanding that a Councillor is no different to a director of a public company, that the decisions they make are open to legal challenge. Perhaps they would then think more carefully about their wanton spending.

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