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Tighten belts says Key, leave us alone respond councils

Prime Minister John Key exhorted about 600 local government conference-goers in Queenstown to tighten their belts.

“Times are tight and ratepayers just can’t endure unaffordable rates rises," he told them.

"We are not telling you how to do your jobs, but we would urge you to think carefully about the capacity of your communities during these difficult financial times.

“I know it’s not easy, and it’s tempting to think your council is an exception or faces special circumstances, but we all have to face up to making difficult choices.”

Mr Key cited the unemployment rates in Spain and Greece of 25% and 22%, respectively.

New Zealand can’t help but be affected by the financial events overseas, he says.

Local Government New Zealand president Lawrence Yule says councils cannot afford to meet higher standards such as earthquake strengthening in shorter times such as five years. He also opposed water privatisation.

Mr Yule challenged the government to leave the Local Government Act 2002 alone and reconsider plans to elevate economic considerations above community wellbeing.

“If one of the reasons for the changes is to limit the role of local government then we question this approach,” he says.

New Zealand’s 78 councils make up 4% of GDP, spending $7.5 billion of public money each year. And they manage $100 billion worth of assets.

More by Chris Hutching

Comments and questions

It doesn't say much for our Councils when, three years into a recession, the PM finds it necessary to tell them to "tighten belts"!!
Where have they been?

"Conferencing" in Queenstown, and elsewhere. For goodness sake, do these councillors not get it?
People like Farmer Brown, paying $10,000 in annual rates to a city council for no water, no sewage, no footpath (OK it's a gravel road), no rubbish collection and no lighting, are rightly incensed by these antics. Talk about pigs with both front feet in the trough!
And then there's the other $10,000 going to the regional council.
Harden up John Key; don't pull your punches!

You are right to talk about "rates", therein lies the fundamental flaw in local Governance.
At present we pay to them a tax/rate from our income, that has no relation to our income, it is calculated on our property value.
Local Gov. funded should be user pay, and that part deemed "public good" and "cost of democracy" should be struck according to ones income via the IRD and using the accepted principles of equitable taxing.

21 of the 36 AKL contingent to the Queenstown conference were allegedly local board members-- what power do they have at the council table--according to a local board member I spoke to they can do little more than recommend ie no power at all-- so why were they carted off to Queenstown ??
Additionally you could get rid of ten percent of council staff and the place would never miss them -- what do they do half the time ?? when every second job seems to be referred to an outside consultant.
The AKL council allegedly has 35 staff members in the heritage department they must be falling over themselves in the staff cafe.

Don't worry. New Zealand is a world leader with it's's ALLLL GOOOODD.

Many years ago I served some time on a small country town Council.I was the owner of a small business and knew the value of the dollar and how far it went.(Or didnt).The value of that experience was that the Council Staff had not heard of the term Zero Budgeting. They soon did and to their amazement they were able to produce a Budget that did all the things needed to bring maintenance up to date and not increase the rates.Its too easy to take last years figure and add a percentage which Im sure happens.Our rates(Auckland City) will rise by $1000 this year as the actual increase exceeds the cap.
Its time for a Ratepayers revolt.Ask the people of Kaipara and particularly Mangawhai how they feel about Council budgets.

What about the 9.75% rate increase being considered by the Timaru City Council.
How can most of the citizens afford that. A very high proportion of same are elderly pensioners. Some of this increase has been caused by the 28.5 million dollar aquatic centre that most don't want ??

We all know that local bodies all work on a "cost-plus" mentality.
Council bureaucrats are very good at protecting their patches, struggle to admit they are wrong at times and charge us all in numerous costs, fees and levies.
From my own experience I would say - if you think that you have a case, then have a go and very often you'll get a result.

Keys a wimp if thats all he told these 'troughers'. How about he man up to something ballsy like he will intervene, hold them personally to account or threaten their jobs? These council geezers just dont give a damn !

He can't fire them surely?- Councils are elected by the ratepayers.

He can't fire them surely?- Councils are elected by the ratepayers.

last year our bill for a waste management wheelie bin was $185.00.This year the same bill is $285.00,thats a 100% increase.So who can afford that,we subsequently have cancelled our bin and bought our own,so its not just councils that are increasing costs.

7 # thats a $100 increase not 100% phew thank goodness your not setting the rates

We are in an area that proposed weighing our 'bin' and I don't see a lock on it prior to collection. So! Out goes the bin but do the rates go down? Fat chance.. If they can't put it in my bin it will go in the ditch.

Local body conference in Queenstown, I am sure its all work , yeah I bet , almost as bad as Hotchins birthday bash in Fiji , where is the fiscal responsibility.

Key has little credibility until he deals to the elephants sent stomping into the local government mansions by central government: the RMA and the Building Act.

If our local elected had any nous or courage they would've sent them straight back!!
But no, they meekly took them on and added to them, simply sent the bill to ratepayers and whined/blamed central Gov.

Good on you John Keys, but use stronger words next time!!
Time these Councils get voted out of existence and replaced with real people who show some responsibility after all the waste in Hamilton.
And they still want to add more to our dept.

Its councils that push up housing by there unreasonable demand for the developers to only build expensive houses because they demand costs like a payment to parks and reserves often exceeding $30,000 or more , on top of that the developer has to fork out for roading water reticulatian etc while councilw are wasting money on stadiums, etc and other wastfull dreams .Every body would be able to afford a home if it wasnt for there greed.

Herp Derp and huuee on the suuee

council's are run by people who flee of others and incapable of standing on their own feet; we are sinking fast

land/building is only expensive because of council levies & tax

tighting belt - yep have a pow wow in queenstowns (what has this party cost the tax payer)

counrty in free fall - thanks govt/council

Where to go to avoid these out of line increase in rates. Maybe I cannot afford to retire and remain in my life long home. Maybe Australia cud be bekoning !!!!

We'd all be better off if the councils were not elected but rather appointed on merit by the government, just like officials within the various ministries.

I'm all for elections and democracy, but when voter turnout is so low for local body elections we can only assume the process simply doesn't work. Those who do vote only seem to vote for those names they recognise on the ballot papers, and have absolutely no idea whether they would make good councillors or not.

This is especially the case when the taxpayer is probably standing behind these councils if they fail financially (query whether the government would ever have the balls to let them fall over).

What do others think?

council's ought to be run by private boards; plainly, thoughts doing job have no idea of the real world

Bring on local body amalgamation please. Way too many local bodies for the size of our country. They all have very expensive buildings, management structures that exceed their responsibilities. And they pay salaries that are way more than they should be given they are in reality "Town Clerks".

Rates rise year on year at rates that way exceed inflation. Councils need to get back to their core services forget the nice to haves.

Where is the accountability. It certainly not the elected Councilors who get bambvozled by the officials.

This lot really need the heavy hand on them. They dont want amalgamation for selfish job protection, the ratepayers and their ability to pay and whether they deliver value is totally non-existent in their thinking.

You are entirely mistaken. Amalgamation reduces accountability substantially. Rates inevitably rise after amalgamation as does debt.

If you want efficiency, allow districts to secede. That competitive threat will increase accountability and ratepayer power.

I concur.

Key & co should lead by example-how about cutting excessive MPs' remuneration and ongoing benefits,
And what about that rapidly-shelved idea of reducing the number of MPs??
There is much Govt could do,but we're not holding our breath!

Local Government Democracy is an illusion!!! Local Councils are run like companies by CEO's and they pay everyone too much!!! The Councillors that are elected officials are just figureheads that rubber stamp their approval on Council spending - but they have no power to force change in a Council. The Councils are autonomous and out of control! Lets see some accountability and some actual control over Council Actions by Councillors - they are representing the people and they appear to have to meaningful influence over the Councils actions.
It's a crazy situation!

Sorry - should have said: Lets see some accountability and some actual control over Council Actions by Councillors - they are representing the people and they appear to have NO meaningful influence over the Councils actions. What has NZ come to to get in this situation???

Agree completely about the lack of local govt democracy and accountability. Not sure I agree that councils are run like companies. Most councils are grossly overpaid and overstaffed because they can simply take whatever their revenue they feel they want next year from a captive group. Companies are subject to competition and regulation. On the other hand, council managers are not required to find efficiencies, in fact the more wasteful they are the bigger the budget they get next year. The Christchurch council and its Town Clerk are prime examples. No company could possibly succeed with these people in charge,

Lets first see what the Central Govt "Better Local Government Reforms" and the LG Efficiency Task Force brings. THEN next ... is to fire up the Auditors to do their job. THEN (Oct/Nov 2013) ... we elect councils who spend our money as if it was their own ... and THEN we have a fighting chance of moving to the root and branch changes to NZLG culture and behaviour that are needed. Google NZLG 2012 Leagues Table refers.

The bad news for the motivated Ratepayers, who own the property that they live in, is that there is a far larger percentage of non property ownering individuals who are allowed to elect the Councillors. there is alos a large group of individuals who want to be Councillors, particularly since 'Councilor' became a paid occupation, rather than a community service.
These last two groups control Rates; and the Rates are driven by the nonproperty group who want more 'freebies'.
Basic economics escapes them, thats why they don't own their home.
Only when election of councillors, is returned to those who own the rateable property, will rates decline, and we will have an affordable community.

The same goes for national politicians. Everyone can vote, despite only some of those people paying taxes. Do you advocate giving people one vote per dollar of tax/rates paid?

To me this would be fantastic, as it would weed out those who don't pay taxes because they are dumb (generally those on welfare) and also those high net worths who structure round paying tax. Its the ultimate in user pays, which would in turn mean resources are incredibly efficiently allocated.

Even better, it would mean the demise of Labour, the Greens, and NZ First as political parties...

Sounds like a good idea to me!
He who pays the Piper calls the tune.

Don't you believe that it's the dumb on welfare...there are the cunning who enjoy their lifetime of leisure at our expense because they feel entitled. Tertiary education has intrinsic worth but shouldn't be a passport to having a false idea of one's worth/elevation to do menial job to make a living..

The right to vote should be dependent on those ablebodied, or not severely disadvantaged, earning that right via meeting their obligations as contributing citizens. But handing out welfare gets votes which is why there's never been a complete overhaul of the that drain for no gain.

Are you referring to the thousands of private consultants and contractors on 'corporate welfare' Victoria?

Both at central and local government level?

Penny Bright
'Anti-corruption campaigner'

Too right those welfare bludgers are cunning - especially the inevitably huge share of superannuitants of way beyond modest means, cosy in their freehold properties and so many still earning handsomely in paid work. Here's the bit nobody ever bothers to clarify - national super comprises 53% of the total welfare budget; unemployment 6%. Yes, that's right, six percent; and research I was involved in some years back confirmed with sufficient precision that about 10% of these could be truly described "bludgers". In other words, 0.6% of all welfare recipients; the remainder in various states of active and productive job search to the extent some were working 40+ hours a week looking for work! Of course I'd have no idea what today's figure might be, in large part because the Welfare Working Group didn't see fit to talk to a single beneficiary about what sorts of policy might help them back into work and reduce the overall welfare liability. And sickness benefits - 4%. Yes, that's right too. Before the ageing snouts in the trough start bleating about "we've paid our taxes..." and all that tired self-serving conceit, well so too have we younger folk. Oh, and our school and university education, and a small fortune for health care, and user pays on everything else in our path. And will continue to do so especially so long as we have to bankroll the ballooning I-want-it-all-born-to-rule-baby-boomer fiscal catastrophe in the making.
I'm so over all this cr*p. Is it possible baby boomers might just shut their mouths for a moment and give voice to more enlightened others to solve the social, economic, environmental, political and democratic disaster that is life on earth today?

A good start by Key but not enough.
The financial deficit these councils have is criminal. At the end of the day "we" the ratepayer are the ones who are fiscally responsible for the debt. The local body governments will admit to no responsibility and as far as they are concerned their conscience is clean, and will continue to spend way and above what we can afford. Financial regulation and oversite on these local bodies needs to be implemented just like the bankers on Wall Street., otherwise standby for more rates revolts.

I agree that Councils need to get more efficient and stick to the core activities. To date it appears that Mayors and Councillors get hold of the purse strings and start considering all sorts of weird and wonderful projects without masterplans. You wonder if they handle their own finances in the same manner.

You note that " Mr Yule challenged the government to leave the Local Government Act 2002 alone," thats pretty rich coming from the person who is leading the charge to force amalgamations on Councils whether they like it or not. It must be really difficult to have strong views one way and to effectively represent your stakeholders who hold strong contrary views.

Councils have no clue that people's salaries are not increasing at an average AFTER TAX rate of 7% per annum for the last 10 years. Nor are salaries likely to increase at anywhere near that after tax rate in the future. With council driven policies leading to no economical new land becoming available, no wonder our children are moving to Australia where the costs of building are significantly lower than here. Onerous and never -ending increases in council rates are unsustainable. There is no personal accountability by Brown and his minions, and once they have bankrupted Auckland, they will simply disappear. Ratepayers need to take heed now before these rates cripple the resale prices of properties.

Please send belts