An opinion editorial on local authority debt by Bruce Wills, President of Federated Farmers, a version of which was published in the Sunday Star Times.
'Local government' to some people is a cure for insomnia, but before you turn the page consider this. Our councils now owe $1,800 for every man, women and child in New Zealand. In reality, it is 'we the people' who now owe eight billion dollars and that sum has quadrupled since 2002. Local government needs reform and ably at the helm is Minister Nick Smith. It's no coincidence he's also Minister for the Environment because the two are closely related.
Federated Farmers policy team is arguably New Zealand's most skilled when it comes to local government issues. We know the Local Government Act 2002 fired a debt starting gun because it provides councils with a "power of general competence" and an activist purpose, to promote "community well-being". While we applaud Horowhenua District Council winning $2.1 million from the taxpayer to lift Shannon's drinking water out of sub-Saharan Africa, how could things have gotten so bad? While Horowhenua District Council is contributing $1 million towards the new plant, it has ear-marked $2.4 million to prime-pump Levin's new cultural and community centre. Such centres have their place but safe drinking water, wastewater and roads are the very things we expect our local councils to deliver. These core services may seem as exciting as watching paint dry, but without them, urban life would be impossible. Council debt has not only exploded but the property rates used to fund councils have soared well above inflation. Certainly, it has appreciated a lot more than the price of milk that created a Select Committee Inquiry. Perhaps a start is to dust off the 2007 Shand inquiry into council rates. The use of debt to fund capital spending, a recommendation, seems to be the only thing councils embraced with gusto.
Local government is also an area where inconsistency reigns supreme. Do you realise some local councils have a two-faced resource consent when it comes to managing wastewater disposal? One is for business as usual, but the other is an 'emergency consent' when the system can't cope as a result of heavy rain or even equipment failure. No other individual, business or farm enjoys such a 'get out of jail free' card. Yet two-faced resource consents have allowed some councils to starve core services of cash, such as critical wastewater upgrades. Instead, 'nice to have' projects mean when the day of reckoning finally arrives, crippling rates result. Kaipara District's wastewater upgrade in Mangawhai has seen public debt go nuclear. At $86.8 million, in its 2011/12 Annual Plan, it's a heck of a liability for only 19,000 people.
The only awareness most people have that sewerage has entered water is when a sign goes up warning them not to collect shellfish or to swim. Not that the media or for that matter canoe paddling politicians stop and ask why. For many farmers, a council 'emergency consent' is nothing more than a legal licence to pollute but one in which we seem to cop the blame for the results. One senior council manager provides a real insight into council thinking. In response to being challenged over why his council applied to pour treated effluent into the Manawatu River, he wrote; "total exclusion of treated effluent being discharged into the river is an admirable goal but ratepayer affordability is also a critical factor which is always taken into account when assessing council initiatives..."
Community well-being starts by prioritising spending that delivers the basics extremely well. Is it no surprise some are now railing against big Chief Executive salary packages?