Quake shows risk in drive to cut costs, says mayor

Tauranga Mayor Stuart Crosby has urged the Government to heed the lessons from Christchurch before it drives through local government reforms with the potential to increase disaster risks on the community.

Mr Crosby told a private sector conference in Wellington this week that although everyone supported driving down council costs, the key message from the Christchurch earthquake was the need for strong infrastructure that could handle a disaster.

"We could put in cheap infrastructure but would it be effective and resistant to natural disasters?" the mayor asked.

He said there was a difference between efficient and effective, and he questioned if this message had got through to the Government, saying: "Cheaper is not always better."

Mr Crosby doubted if councils could achieve zero budgeting so there were no rate increases. He said there were extenuating factors, such as hikes in power and insurance costs, outside council control.

The biggest challenge facing councils in high-growth areas was financing the infrastructure needed to service that growth.

"We put in lead infrastructure that has to be paid for when it goes in. The challenge around paying for it was to maintain the unused part," he said. For instance, when Tauranga's $100 million Southern Pipeline gets turned on, only 25 per cent of its capacity would be used. The challenge was to maintain the other 75 per cent until development fees had soaked up the rest of the pipeline's cost.

"When you talk about zero costs, it is very difficult and sometimes you have got to charge something else out," Mr Crosby said.

As for restructuring and amalgamations, he said the Government's reform package was back to front. It should decide what functions local government should be involved in before it chose the best governance method. He said it was generally accepted that the bill was driven by a knee-jerk reaction by the original architect of the reforms, former Local Government Minister Nick Smith.

"I have the distinct impression the Government wishes it had not started this process because they have bigger problems. Hopefully,it will listen to councils and modify the bill. There are some good parts to it."