Monday, April 06, 2009

Drowning local government in the bathtub

After less than six months as Local Government Minister, Rodney Hide is moving forward with the first part of his radical agenda: drowning local government in the bathtub:

Relief for rate-paying homeowners could be on the horizon with Local Government Minister Rodney Hide planning on presenting a paper to cabinet in the next few weeks allowing for rates to be capped.

It has been suggested by campaigners against rates rises that New Zealand follow the American example and have rates controlled by legislation.

If the plan is approved, councils would have to consult the people to decide when and why there was a rate rise from year to year.

Capping rates sounds like a great idea, until you remember that they pay for your streets, water, sewage systems, parks and libraries. Requiring a referendum for local government to raise rates will see that infrastructure and services left to rot as councils cut short-term costs by skimping on maintenance. That's certainly been the experience in California, where a similar provision - the infamous Proposition 13 - starved state and local governments of revenue, leading to a decline in infrastructure, fire departments being gutted, and California's schools falling from the top to the bottom of inter-state educational comparisons as funding declined. Our local government doesn't pay for schools, fortunately - but the list of things they do pay for ought to be more than enough to give pause for thought.

And if its not enough, I have just two words: "flood control". In large parts of the country, rates are what you pay to stop your house from being underwater every time it rains. But I guess people in live in the wealthier parts of Auckland just don't care about that.