Council spending scrap
THE business community wants the Wellington City Council to tighten its belt.
The Government heard final submissions on Rodney Hide’s Local Government Act Amendment Bill last week, and former Wellington Chamber of Commerce president Charles Finny says the bill doesn’t go far enough to constrain council spending.
The Amendment Bill aims to tighten council expenditure, and support the newly formed Auckland “Super City”.
Finny told the Government that councils should be restricted to a “list of core funding”, such as civil defence and street lighting, and hold referendums for spending like tourism promotion.
“Businesses pay 50% of the rates in Wellington, and when the council moves beyond core business it causes an excessive rates inflation,” says Finny, who now heads the Local Government Forum, representing groups like the Business Roundtable, and NZ Retailers’ Association.
Finny is critical of the Wellington City Council’s $200 million budget deficit and wants the city to use more Council Controlled Organisations (CCO), which now control 80% of Auckland’s “Super City” income.
Water company Capacity is an example of an existing Wellington CCO, which manages water services on behalf of Wellington City Council and Hutt City Council.
“[CCOs] would help to run a slimmer operation,” Finny says.
He says spending on the Indoor Sports Centre, sending a delegation to the Copenhagen Climate Change conference and the $350,000 Rugby World Cup statue are wasteful.
Wellington Mayor Kerry Prendergast replies that The Local Government Act Amendment Bill originally included legislation for a “list of core funding” supported by Finny, but negative public feedback forced the Government to reject it.
“This is a Hide thing; he makes a list of core services then decides to add libraries because his mother uses one. And then he wants to add a ‘Party Central’ for Auckland to the list,” laughs Prendergast. “It would be too arbitrary to administer across the country, so that part of the legislation is gone.”
She also dismisses Finny’s call for more CCOs in Wellington.
“In Auckland we have seen years of divisive governance, and in desperation the government has put in place something of an overreaction.”
Prendergast says Wellington’s business community is benefiting from recent changes to the rates structure.
In June rates increased 6% for residential property owners, while the commercial sector enjoyed a near zero rise, to “rebalance” the rates intake, she says.
“Businesses had been paying four times the amount of residential property rates,” says Prendergast, who hopes to drop the business rate below three times of residential property rates.
She says with an asset base of $6 billion, the council’s $200 million budget deficit is manageable, especially taking into account “easily realisable assets,” such as landholdings.
However, although Finny says rates should be pegged to inflation, he admits the model of governance used by the Hutt City Council, which has kept rates near the rate of inflation for a decade, is not adequate.
Prendergast says pegging rates to inflation means less growth.
“The Hutt has seen very little growth compared to Wellington, and we are building capacity and our assets.”
Prendergast is confident future generations will be willing to foot the intergenerational debt, which is conservatively predicted to rise to $350 million in 10 years.
However, mayoral candidate Jack Yan says rate payers shouldn’t be burdened with higher rates because their council is in debt.
“People in this city are struggling, and I think the mayor sitting up in her mansion forgets that. We are still feeling the affects of the recession.”
He warns that council debt is higher than the publicised $200 million, because spending on the Rugby World Cup and the National and Local Governments “leaky homes package” has not been accounted for.
Yan’s solution is to reshuffle council priorities, and stop spending on things like the Basin Reserve Flyover, a Rugby World Cup statue, and a new over-bridge from the Michael Fowler Centre.
“If Prendergast is such a good business person, then why are rates rising 6.8% for home owners?”
The overall rates increase for Wellington, residential and commercial inclusive, is 3%.
The Government heard final submissions on Rodney Hide’s Local Government Act Amendment Bill last week, and former Wellington Chamber of Commerce president Charles Finny says the bill doesn’t go far enough to constrain council spending.
The Amendment Bill aims to tighten council expenditure, and support the newly formed Auckland “Super City”.
Finny told the Government that councils should be restricted to a “list of core funding”, such as civil defence and street lighting, and hold referendums for spending like tourism promotion.
“Businesses pay 50% of the rates in Wellington, and when the council moves beyond core business it causes an excessive rates inflation,” says Finny, who now heads the Local Government Forum, representing groups like the Business Roundtable, and NZ Retailers’ Association.
Finny is critical of the Wellington City Council’s $200 million budget deficit and wants the city to use more Council Controlled Organisations (CCO), which now control 80% of Auckland’s “Super City” income.
Water company Capacity is an example of an existing Wellington CCO, which manages water services on behalf of Wellington City Council and Hutt City Council.
“[CCOs] would help to run a slimmer operation,” Finny says.
He says spending on the Indoor Sports Centre, sending a delegation to the Copenhagen Climate Change conference and the $350,000 Rugby World Cup statue are wasteful.
Wellington Mayor Kerry Prendergast replies that The Local Government Act Amendment Bill originally included legislation for a “list of core funding” supported by Finny, but negative public feedback forced the Government to reject it.
“This is a Hide thing; he makes a list of core services then decides to add libraries because his mother uses one. And then he wants to add a ‘Party Central’ for Auckland to the list,” laughs Prendergast. “It would be too arbitrary to administer across the country, so that part of the legislation is gone.”
She also dismisses Finny’s call for more CCOs in Wellington.
“In Auckland we have seen years of divisive governance, and in desperation the government has put in place something of an overreaction.”
Prendergast says Wellington’s business community is benefiting from recent changes to the rates structure.
In June rates increased 6% for residential property owners, while the commercial sector enjoyed a near zero rise, to “rebalance” the rates intake, she says.
“Businesses had been paying four times the amount of residential property rates,” says Prendergast, who hopes to drop the business rate below three times of residential property rates.
She says with an asset base of $6 billion, the council’s $200 million budget deficit is manageable, especially taking into account “easily realisable assets,” such as landholdings.
However, although Finny says rates should be pegged to inflation, he admits the model of governance used by the Hutt City Council, which has kept rates near the rate of inflation for a decade, is not adequate.
Prendergast says pegging rates to inflation means less growth.
“The Hutt has seen very little growth compared to Wellington, and we are building capacity and our assets.”
Prendergast is confident future generations will be willing to foot the intergenerational debt, which is conservatively predicted to rise to $350 million in 10 years.
However, mayoral candidate Jack Yan says rate payers shouldn’t be burdened with higher rates because their council is in debt.
“People in this city are struggling, and I think the mayor sitting up in her mansion forgets that. We are still feeling the affects of the recession.”
He warns that council debt is higher than the publicised $200 million, because spending on the Rugby World Cup and the National and Local Governments “leaky homes package” has not been accounted for.
Yan’s solution is to reshuffle council priorities, and stop spending on things like the Basin Reserve Flyover, a Rugby World Cup statue, and a new over-bridge from the Michael Fowler Centre.
“If Prendergast is such a good business person, then why are rates rising 6.8% for home owners?”
The overall rates increase for Wellington, residential and commercial inclusive, is 3%.
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