Council funding - the myth lives on

The legendary quest for the Holy Grail has nothing on New Zealand local government's endless search for additional funding sources. Illustration / Peter Bromhead

The legendary quest for the Holy Grail has nothing on New Zealand local government's endless search for additional funding sources.

Aucklanders have been scrapping with the Government over who should pay for roads and sewers and other local services since the inauguration of the first council in November 1851.

Historian Graham Bush says at that meeting, Lieutenant-Governor Robert Wynyard dangled the possibility of the Government handing over a third of state land sale profits to fund the running of Auckland. This was greeted with much cheering and foot-stomping, resulting in the "sudden sinking" of the floor in the Supreme Court where the meeting was being held.

It was an ominous sign of things to come. For the next six months there was a stalemate. Councillors refused to raise any rates, demanding the Government pay.

The governor refused. Eventually, without passing a single bylaw, or funding a road, councillors stopped attending meetings and the country's first attempt at local government fizzled out.

Those pioneer councillors would have felt right at home yesterday as Auckland councillors voted to hire not one team of expensive consultants but two, to prepare competing reports on alternative funding sources. This only a week after Local Government New Zealand unveiled the results of a year-long probe into the same topic - chaired by a senior Auckland councillor, Penny Webster.

The LGNZ report is broad brush stuff, a 10-point plan that repeats old perennials like the right to levy rates on government-owned schools and hospitals, and introduce visitor taxes. There are also some more left-field options, such as sharing mineral royalties with the Government.

The probes the Auckland Council is commissioning are more narrowly focused, canvassing all the touchy political issues such as the sale of airport and port shares and other assets and various forms of partnership with private enterprise including "outsourcing opportunities".

Exactly what two expert reports from business-friendly consulting firms are going to come up with that we don't already know beats me. Mayor Len Brown has always been against the sale of strategic assets such as the airport shares, and repeated his opposition to the Herald before the meeting. In the end, it's going to come down to the politics, not reports.

Official investigations into alternative funding of local government have been going on for decades. The libraries are full of their dusty remains. In the 1999 and 2002 election campaigns, for example, Labour proposed to compensate councils for the loss of rates on large holdings of state-owned land.

Eventually, in late 2005, the review, conducted by local and central government bureaucrats, concluded no real problem existed. The best the local politicians got was Labour agreeing to Auckland requests for a regional fuel tax to help fund its roads. But before that could be implemented, Labour was defeated and the incoming National Government scrapped the legislation.

Local Government Minister Paula Bennett, speaking at last week's LGNZ conference, dismissed the latest LGNZ report, telling delegates that "first and foremost local government needs to demonstrate that it can live within its means. Ratepayers are not willing to pay more for services while they see waste".

With my thumping new rates demand in mind, it's a tempting message. My thoughts went to the $1000 bike stand that recently appeared alongside my bus stop. A stainless steel "staple", plugged into the asphalt, it's handy to rest your bottom on when the bus shelter fills up, but I've never seen a bike tied up alongside. Auckland Transport tells me it is a "New Sheffield" model, one of 102 that have popped up on transport routes around the town because of popular demand.

Why you would leave your bike at a stop about a five-minute pedal from the CBD, and catch the bus instead, I have no idea.

In 2001, Auckland City mayor John Banks took the Bennett approach. On assuming office and looking to shave $25 million from the city budget, he set up a razor gang headed by Sir William Birch.

The former National Party Finance Minister excelled himself, identifying cuts of $46 million. Among recommendations accepted by the council was a sell-down of airport shares and the divesting of pensioner flats.

Without supporting either of these moves, it does remind you there is an alternative to over-stretching your budget.