KEY POINTS:
The much-anticipated independent inquiry into local body rates may bring changes to the way councils raise money - but will not necessarily deliver lower rates.
Although it will recommend how rating can be "enhanced", the broader questions of what councils should - and should not - do will
not be examined.
Details of the $1.5 million inquiry received a mixed reception yesterday with critics claiming the terms of reference did not go far enough to allow major changes but its supporters appeared pleased.
Local Government Minister Mark Burton and New Zealand First leader Winston Peters were enthusiastic about what the inquiry might come up with when it reports next July.
Mr Burton had not wanted to be prescriptive about what the inquiry would look at, trying instead for enough flexibility to allow it to cover a wide range of issues.
Mr Peters believed there was the prospect of "real change" flowing from the inquiry.
Although the public probably hoped for lower rates, he had different expectations.
"What I would expect from a rating inquiry is that there would be a better informed populace, who appreciate there have been some enormously beneficial advances in local government delivery of their services," Mr Peters said.
The inquiry was announced by Labour and New Zealand First in August when debate about rates rises was at fever pitch, spelling the end of a member's bill from Act leader Rodney Hide that would have capped rate rises.
The inquiry's three-member panel consists of former World Bank public financial management specialist David Shand (who will be the chairman), property and valuation expert Graeme Horsley and senior Massey University lecturer Christine Cheyne.
Mr Peters said the three would bring "fresh eyes" to the rates issue, which was better than having a group of local government experts dealing with the matter.
Among the panel's tasks will be to look at the level of rates and related trends, drivers of local authority expenditure and the sustainability of rates as the major revenue-raising tool.
Written public submissions will be called for early in the new year and selected people or groups will be able to make oral submissions.
It appears unlikely the inquiry will have enough time to hear all submissions orally, a matter Mr Burton said it would have to deal with.
He also defended the length of time taken - almost 10 weeks - to get the inquiry's terms of reference finalised.
The delay drew trenchant criticism from some of Labour's political opponents but Mr Burton said extensive consultation with other political parties was the reason the terms of reference had taken so long.
The Greens had been closely involved and were happy with the terms of reference but National was concerned members of public would have only a limited voice.
National's local government spokesman, John Carter, said it was a "great disappointment" there was only going to be limited participation from the ratepaying public.
"Labour won't be making any significant changes to rates before the next election, that much is now clear," he said.
Local Government New Zealand president Basil Morrison said his organisation supported the terms of the reference of the inquiry.
But he already knew that an objective examination of the rating system would show it was under pressure from the additional responsibilities and costs faced by local government.
Mr Morrison said the inquiry "must lead" to better funding tools, including an increased funding contribution by central Government, if rates were to be sustainable.
The agenda
* It will: Consider local government rating and other revenue-raising mechanisms, and make recommendations for enhancing rating and other funding mechanisms for local authorities.
* It will not: Review the system of local government.
Partner left out of loop
United Future leader Peter Dunne yesterday launched a stinging attack on the rates inquiry, complaining he had been left out of the loop.
In an unusual move from the leader of one of Labour's confidence and supply partners, Mr Dunne laid into Local Government Minister Mark Burton's handling of the terms of reference consultation.
Mr Dunne said he was disappointed there had been no consultation with United Future.
"We expressed an interest in being involved, and the minister kept saying we would be consulted, but the first time we hear from his office is the release of the terms of reference today," Mr Dunne said yesterday.
"It's not the best way to treat a support partner."
United Future had made it clear publicly that the issue it wanted confronted in the inquiry was the structure, form and activity of local government.
But the inquiry's terms of reference as announced yesterday rule that out.
"I suppose that I could cynically say I'm not surprised they chose not to consult us," Mr Dunne said.