4. STEVE CHADWICK (Labour—Rotorua) Link to this
to the Minister of Local Government
What are the key objectives of the local government rating inquiry?
Hon MARK BURTON (Minister of Local Government) Link to this
The objective of the inquiry is to consider issues relating to current local government rating and other revenue raising mechanisms, and to provide recommendations to the Government for enhancing rating and other funding mechanisms for local authorities.
The inquiry panel, which I met with this morning, will report its findings and recommendations by 31 July 2007.
John CarterIs the Minister aware that Mr David Shand twice stood as a Labour Party candidate in the Wellington Central electorate, and that Dr Christine Cheyne worked in the Prime Minister’s office in 2001 and 2002; what steps has he taken to ensure that no conflict of interest exists that might undermine the independence of this much-needed inquiry; and is he sure that we will not end up with the same sort of thing we had with the Ingram inquiry?
As my colleague just noted by interjection, similar steps to those that were put in place when people of the calibre of the Rt Hon Jim Bolger were appointed to important bodies. I note that in the case of the inquiry chair, David Shand, in the 32 years since his brief involvement with politics, which the member raised, he has held extensive international financial positions with the World Bank, the IMF, and the OECD, and numerous other positions—[ Interruption]; auditor-general no less—in state and federal Government in Australia. I have absolute confidence in the integrity and competence of all three members of the inquiry panel.
Hon Brian Donnelly Link to this
Does the Minister agree that considerable dependence upon property rates by local councils in order to raise revenue has created genuine problems for those on fixed low incomes who happen to own homes with rapidly escalating values, and will the review consider the sustainability of rates being the major revenue raising tool?
Indeed, the very people whom the member refers to are among those who have expressed the greatest level of concern, leading to this inquiry. The concerns raised by them and on their behalf will be very much within the province of the terms of reference of the review.
Hon Peter DunneHow can the Minister have any confidence that this inquiry will deal with the underlying concern people have about rising rates bills when it specifically rules out addressing the major cause of rising rates, which is the activity of local government?
Indeed, I do have confidence and I do not agree with the member’s interpretation. Although the inquiry rules out a first-principles review of the place of local government in the democratic arrangements of New Zealand, it most certainly does allow for quite extensive consideration of the long-term sustainability of rates and other forms of local government financing.
Hon Brian Donnelly Link to this
Can the Minister confirm that long-term community plans will require expenditure by local government of $30.8 billion over the next 10 years—three times more than in the past 10 years—of which over 80 percent will be on essential infrastructural development; if so, what effects would the capping of rates have had on these requirements?
Indeed, I can confirm the member’s figures; they basically are consistent with the analysis that officials have done for me. The impact of capping on that fact would be negative at best. In the case of many of the provincial and rural based councils, capping would be profoundly limiting and would see the quite rapid rundown of their ability to finance core infrastructure such as roading, water, and waste water.