Brian Rudman: Rates revolt underlines need to find a better way

Grey Power says it's swinging its 100,000 members in behind the NoMoreRates campaign led by North Shore politician David Thornton. National vice-president Don Chapman says his oldies will actively campaign for the replacement of the present rating system.

Welcoming the news yesterday, Mr Thornton said he had plans to create a united front incorporating Federated Farmers and Business NZ.

The only thing missing is the rather vital ingredient - what alternatives to the council property tax do the protesters have in mind?

On this question they seem as much at a loss for an answer as the Wellington public servants, who since 2002 have been beavering away, without apparent success, on a new method of local government funding.

NoMoreRates' objective is "to replace the present system of council rates with a new, fairer system" and "to develop a system of restraining council expenditure to levels which the community approves of, and which the community believes it can afford".

Don't we all love the sound of that. But you search in vain on the campaign website for a recipe for this fairer system.

The NoMoreRates dream is not so far removed from the demands the pressure group Local Government New Zealand presented to incoming Local Government Minister Chris Carter in August 2002. Referring to the "long-standing grievance" festering within local councils forced to take on more and more Government-imposed tasks, the briefing paper called for "a commitment to look at alternative funding sources".

Indeed it went further, declaring "the most appropriate ways of funding local government activity should be explored from first principles, reflecting the nature of the 21st-century economy and society. This review would look at issues such as national funding for national benefits of local investment, eg, clean water, tourist facilities, tools available for funding, tax opportunities, and the history of divestment of national services to local control without additional funding."

It was a stirring call to arms from the country's town halls. Wellington's response was to call a seminar.

Finally, last August, the joint working party of civic and Government bureaucrats convened to prepare for the revolution declared, after two years' cogitation, that there was no real problem in the first place.

Overall, "rates levels and their projected increases do not place an unsustainable burden on communities in relation to services and facilities provided". They did concede that a small proportion of local authorities were having difficulties coping "using existing funding tools".

A follow-up report was due last December proposing additional funding methods, but that was put off for the election. A March deadline came and went, and there's now talk of September. From the lack of enthusiasm the officials have so far shown in even admitting there's a problem, it's hard to believe any revolutionary proposals are coming.

The present Government's predilection is to keep fine-tuning the existing Model T system. So in July there was a major increase in funding for the rate rebate scheme for those having difficulty paying. The Government has also increased targeted assistance to councils in areas such as roads, public transport, sewerage and tourist facilities.

Regardless of this targeted help, local bureaucrats and their tame politicians continue to ratchet up the rates. Auckland City ratepayers are the worst off in the region, facing an average 13.3 per cent rise, while in North Shore ratepayers face a 9.49 per cent increase. What's more, councils seem to think they can squeeze us a lot more before the pips squeak.

Auckland City rates are programmed to rise 124 per cent over the next decade, North Shore's 110 per cent and Rodney's 133 per cent.

To borrow from the birth control campaigners, has everyone in local government forgotten how to say No? Since when did 10 per cent plus annual rate rises become de rigueur?

I can't see anything replacing the rating system. It's there and it works. But there's an urgent need to supplement property tax with other income streams.

Increased Government contributions are an obvious source. Paying rates on schools and other Government land holdings would be a start. More targeted revenue-gathering is another option. A bed-tax on tourist accommodation to pay for Eden Park upgrades and Maungawhau tourist improvements, for example. Borrowing for long-term projects is yet another alternative.

How many politicians must be voted out before this message gets through?