Published 22 October 2009
Local Government Minister Rodney Hide said yesterday that recent analysis by the Department of Internal Affairs of data from long-term council plans for the next decade indicated rates income would continue to rise faster than council costs.
Addressing a Property Council breakfast in Wellington, Mr Hide said: “Even more concerning is that the cumulative increase in rates/head over the next 10 years is 49%, and that rates funding will increase as a proportion of councils’ operating receipts.
“At the same time, public debt for the sector is forecast to increase by 97% and interest expenses by 91%. And it is commercial & residential ratepayers who are expected to meet the increases. Something must be done. These trends must be stopped.
We are working to achieve more effective & responsive local government, and a brighter future for ratepayers, by improving aspects of the Local Government Act 2002.”
Mr Hide has stated his position many times. But in the rising heat as Auckland’s governance transition to a super-city council comes closer, it’s worth repeating. “The 3 underlying principles of the review are that:
local government should operate within a defined fiscal envelopecouncils should focus on core activities, andcouncil decision-making should be clear, transparent & accountable.
“I am looking at key measures such as simplified long-term planss, plain English financial disclosures, a less costly service performance reporting system, greater use of polls or referenda and more effective use of the community outcomes process. And we need to improve decision-making processes.
“I believe councils’ consultation processes are unnecessarily onerous & complex. Worst of all, they are largely meaningless to the average ratepayer. That’s why I’ve got my officials looking into making the long-term plan process simpler and ensuring consultation is more effective.
“Most long-term plans are bulky documents, running to hundreds of pages and often more than one volume. This not only makes it difficult for ratepayers to identify the things that really matter to them, it can also deter them from taking part in decision-making processes.
“It must surely be possible to remove a lot of the more descriptive, highly technical & non-strategic material from long-term plans to produce a document people can actually understand!
“Councils vary hugely in their presentation of financial & performance information. I’ve found that even something as simple as rates income is being reported in 3 different ways in council plans & reports.
“Good quality comparative data is essential if we are to achieve accountable & transparent local government. We’re looking at how financial disclosures can be written in plain English, so you don’t need to be an accountant to understand them and so ratepayers can more easily compare how their council is performing against others.
“Another thing we’re looking at is how councils can prepare clear financial strategies to manage issues like rates, debt & expenditure levels a whole lot better, and then set priorities for expenditure.
“I am convinced that a good financial strategy will help councils, in consultation with ratepayers & residents, to make better decisions about trade-offs. It will provide a basis to measure a council’s financial management record and help identify future financial management issues.
“Included in the review is a proposal for pre-election financial reports. These would give an account of activities over the previous 3 years and list items of expenditure for the next 3 years.
“This would give ratepayers & residents up-to-date information about the performance of the current council and the state of the books, and a clear understanding of the issues the incoming council will need to consider.
“This would help promote well informed local debate about expenditure priorities and enable electors to put the hard questions to candidates about past & proposed expenditure.
“Local elections have not had a high turnout in recent years. Access to clear information on issues facing a council and the sorts of decisions that need to be made should help to stimulate greater interest in local government amongst voters, businesses & the media.
“The question of the core business of local government has been the subject of much publicity over recent months. I am definitely not proposing that central government prohibit local councils from undertaking certain activities. The review is about enabling councils to do a better job prioritising local expenditure and staying focused on providing essential services. They need to engage more effectively with their residents and think carefully before taking on risky or novel ventures that might best be left to the private sector.
“All New Zealanders share some expectations of what their councils will provide. I would like to see local authorities planning for & funding the services that have traditionally been council-funded, rather than indulging in more financially risky or novel activities.
“The use of referenda is another aspect of the review of the Local Government Act 2002. I strongly believe referenda can be a vital tool for strategic decision-making. A clear citizen mandate will overcome the division often accompanying proposals for significant expenditure.”
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Attribution: Ministerial release, story written by Bob Dey for the Bob Dey Property Report.