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Leader's LetterSeptember 2006
Rates GrateNew Zealand First has long been concerned about how local government raises revenue. In our 2005 election manifesto we promised to:
When our caucus examined Rodney Hide’s Bill closely we realised that it would not have advanced any of these pledges. This was a very narrow Bill that simply put limits on increases in the total rate take each year and over any three years, by an individual council. This Bill would not have necessarily prevented an individual household’s rates from increasing annually beyond the limits set by the legislation. Nor would it have prevented councils dramatically increasing user pays charges. Moreover it had a provision which allowed for dispensation by the Minister of Local Government to allow a council total rate take to go beyond the limits set by the legislation. Even Rodney Hide admitted that it did not address the main driver of rampant rate rises, and that is steep escalation of property valuations. When we pointed out these deficiencies most people agreed. However, many still wanted the Bill to go to select committee to allow for a wideranging debate on the issue of rates. Unfortunately this would not have happened because standing orders limit consideration of any legislation to be confined to the scope of the Bill. In a select committee dominated by the Greens and Labour no wide-ranging consideration would have been allowed. Therefore, from day one we called for an independent inquiry which was transparent and entitled the public to have its say. I referred in my first reading speech to the McLeod Review of taxation at the central government level. While highlighting the problems with the Bill we had to keep all options open. This was in order to gain maximum leverage on the government in obtaining the necessary inquiry. We said we would wait until the last minute before making up our mind and that that would be determined by whether we got what we wanted. It is interesting to note the number of groups now saying that what we have negotiated is the way forward. Those groups include Federated Farmers, Local Government NZ and all other political parties with the exception of ACT. However, for weeks New Zealand First was a lone voice in the wilderness. By remaining resolute we achieved our goal, which we believe is a genuine mechanism to advance our manifesto pledges. In fact, both United Future and National have said that they were only voting it to select committee to achieve the socalled debate. Neither of these parties would have supported it further. I can’t help feeling the public has been conned over this piece of legislation, and am proud that New Zealand First has won an independent and comprehensive inquiry. Hon Brian Donnelly MP
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