11. JOHN CARTER (National—Northland) Link to this
to the Minister of Local Government
Will he support and cooperate with the Local Government New Zealand investigation into the extent of costs imposed on local councils by Government legislation?
Hon NANAIA MAHUTA (Associate Minister of Local Government) Link to this
The Government will continue to support and cooperate with Local Government New Zealand.
Does the Minister know that the passing of legislation by his Government that increases costs on local government is adding to ratepayer hurt?
Hon NANAIA MAHUTA Link to this
Let me just correct the record. The House may be interested to know about the issue John Carter is talking about and the 67 Acts he has raised. Our initial analysis is that 26 Acts do not appear to impose any costs on local government; 28 were specifically requested, in whole or in part, by the local government sector; and a number of the Acts have responded directly to major concerns, like the Building Act, the Resource Management Act, and the Dog Control Act. The member should get his facts right.
Hon Mark GoscheHon NANAIA MAHUTA Link to this
There is a good story to tell. In fact, according to Statistics New Zealand, in the year to June 2005, councils received $661.4 million from central government, accounting for about 13 percent of council income. That went to extra funding for rates rebate, extra funding for new transport, extra funding for drinking water schemes, and extra funding for water and sewage disposal schemes for small communities.
Hon Brian Donnelly Link to this
Will the Minister give serious consideration to New Zealand First’s call for a properly funded, independent commission of inquiry into funding mechanisms for local bodies that will enable members of the public to have input into seeking solutions to the myriad of issues currently confronting the country on this front?
Hon NANAIA MAHUTA Link to this
I am informed that there are reports from individual local authorities about this matter, and that there may be an investigation of cost pressures faced by local councils. We want to work with local councils, not against them. It is important to understand that our relationship with local council is at the forefront of any change in that sector. I understand from the Minister that no formal approach clarifying the issues of cost pressure has currently been received. However, if that is a matter brought to his attention, he will consider it.
Is the Minister satisfied with the level of compliance cost analysis conducted for new legislation affecting local government, and did he discuss this with local government; if so, why are local councils and their ratepayers becoming increasingly irate at the hurtful costs?
Hon NANAIA MAHUTA Link to this
Can I reconfirm that the relationship we enjoy with local government is at the forefront of trying to work with it not against it. In fact, at the Local Government New Zealand conference, the Prime Minister herself said that through the central government and local forum, we have found a way of working together that is task-focused and looks to meet challenges and solve problems. We will continue along that track.
Gordon CopelandWill the Government scrap GST on rates to ease the burden felt by New Zealand homeowners, as this simply equates to a tax—
Madam SPEAKERWill the Government scrap GST on rates to ease the burden felt by New Zealand homeowners, as this simply equates to a tax by central government on a tax imposed by local government, or, alternatively, will the Government lower the rates burden by returning the GST collected to local governments?
Hon Dr Nick Smith Link to this
I raise a point of order, Madam Speaker. The question is about GST and I wonder whether the member might not direct it to the leader of United Future who is, in fact, the Minister of Revenue responsible for the goods and services tax?
Hon Dr Nick Smith Link to this
The question is directed to the Minister of Local Government. Can you explain to me your ruling, given that you are very tight to members of the Opposition—unless there is a different set of rules for the Government—that questions need to be within Ministers’ responsibilities. I am not aware that the Minister of Local Government has any responsibility for GST. It is, indeed, the responsibility of his colleague the Minister of Revenue.
As I heard the member’s question, it did relate to rates, which are a local government responsibility. So perhaps we could therefore ask the Minister to address the question.
Gerry BrownleeI raise a point of order, Madam Speaker. That is a bit like ruling that the Minister of Local Government could have a view on the cost of postage because rates demands get sent out in an envelope. I think if Opposition members are constrained to asking questions on a tight frame, then so should those who are asking patsy questions of the Government.
Hon Dr Michael Cullen Link to this
It would be interesting if the members noted that, of course, this is a matter that had been raised by local government with the Minister of Local Government on any number of occasions. The Minister of Local Government has certainly been competent to respond on behalf of the Government that has a united view on this matter.
That is fair enough. I take the Leader of the House at his word. What is the Minister going to do about the cost of postage?
I thank the member for his intervention but the point is that if the Minister addresses the question in terms of the ministerial responsibility and not that of revenue, it will be in order.
John KeyI raise a point of order, Madam Speaker. The issue of ministerial responsibility is that the Minister of Revenue decides whether GST is applied to an element of spending or not, not the Minister of Local Government. The Minister of Local Government cannot change the rate of GST; it is an issue only for the Minister of Revenue.
Hon Dr Michael Cullen Link to this
That is not at all true, of course. Parliament decides whether GST is applied to rates. It is in the legislation, and would require legislation to amend. That legislation could be in the name of the Minister of Local Government, Minister of Revenue, or indeed the Minister of Finance because policy matters on tax are shared between the Minister of Revenue and the Minister of Finance.
Hon NANAIA MAHUTA Link to this
The answer to the question is no, not to my knowledge. However, if the member would like to direct that question to the Minister of Revenue or Minister of Finance, I am sure he would receive a response. But there is a good story to tell. The Government has put $50.6 million into the rates rebate scheme and an extra 300,000 families from that support.
Mark BlumskyDid the Minister consider when the Government was writing legislation like the Building Act its cost to an authority like Wellington City Council and the hurtful impact of the $1.7 million extra cost that this Act imposed on its ratepayers, or does the Minister not care?
Hon NANAIA MAHUTA Link to this
The only response to that particular question is to put it into context. The cost drivers, in terms of local authority rates, include a number of things: growth in the city—people have to respond to growth—the need for more housing, and the need for more homes. In fact, local authorities need to make the decisions taking into account all the cost drivers, and so they should.
Dr Don BrashThe question was addressed at length, I thought—probably not to the satisfaction of the member, but it was addressed.
Does the Minister agree with Local Government New Zealand Vice-President, Kerry Prendergast, that Labour’s new legislation has placed a huge burden on local councils; if not, why has Local Government New Zealand been forced to investigate this growing burden?
Hon NANAIA MAHUTA Link to this
The answer to the first part of the question is no. It is hard to reconcile comments like that of Dr Brash that it is his view that New Zealand is currently on the brink of a crisis of confidence in local government, with the comments of Basil Morrison, President of Local Government New Zealand, who said that there have been some significant wins for local government. For example, the Government has expanded and revised the rates rebate scheme, directly addressed the issues of rates affordability at the individual household level, and in some communities up to 50 percent of households have become eligible for some kind of assistance. Those comments were made by Basil Morrison, President of Local Government New Zealand.
Is the Minister aware of the growing wave of concern and ratepayer revolt starting to occur across the country, as mentioned by the leader of the National Party, Don Brash, and what is the Minister’s estimate of the percentage of annual increase in rates charged by local councils that is due to costs being passed on by this Government’s legislation?
Hon NANAIA MAHUTA Link to this
In answer to the issue of concern out in the community about rates, yes, the Government has heard a number of those concerns. However, that is a decision for local government. In answer to the next part of the question with regard to shifting pressures, I have already answered that question, but I can answer it again. Twenty-six bits of that legislation do not impose costs on local government, at all. Twenty-eight were specifically requested, in whole or in part, by local government, and a number responded directly to major public concerns. That is where it stands.