Local Government Bill necessary but not sufficient
Released 05 Aug 2010
Federated Farmers has voiced their concerns, at a Select Committee hearing today, about the illogical and unjustified contribution that farmers make to local councils.
"We presented our submission on the Local Government Act Amendment Bill to the Local Government and Environment Select Committee at Parliament this morning," says Don Nicolson, Federated Farmers President.
"Farming makes a massive contribution to New Zealand's economic well-being, which of course we are very proud of. But unfortunately we also make a massive contribution to the funding of local councils. It is a bizarre and illogical situation and it needs to be fixed for the sake of all New Zealanders.
"Federated Farmers has always been a committed participant in the consultation processes of local government. This means we're very experienced and we understand the frustration of getting good information from councils, especially about their costs and sources of funding.
"We also understand the difficulty of comparing the costs and plans of councils and the challenge of finding financial information for the prior year.
"The broad mandate of local government under the 2002 legislation has helped drive large rates increase and means some of our members are facing general rates bills of over $10,000 a year. Yet farmers are mostly unable to establish where this cost is actually going, for example how much of that bill is funding the latest tourism enterprise in their district?
"So, of course we're happy to see the Local Government Act Amendment Bill address some of the key shortcomings in the 2002 legislation.
"For example, it places emphasis on the need for councils to deliver core services and it adds valuable reporting requirements. This will ensure that information on past financial performance and future risks will be available to the public.
"We're also glad to see it will reduce the emphasis and status of the excessively broad, opaque and expensive community outcomes processes while enhancing the opportunity for private sector involvement in key infrastructure areas.
"All of these proposed measures will be of great advantage to the rate payer and will allow New Zealanders to have a more informed input into the consultation processes on local council services, spending and rates.
"However, although the Bill is helpful and a step in the right direction, it will not solve the fundamental problem of local government and that's the basis of its funding.
"Local government is very reliant on general funding from property owners and this is exactly what weakens its credibility and its ability to efficiently reflect the needs and desires of a whole community.
"While property values remain the predominant source for local government funding, I can assure the Select Committee that we will be back in the near future to discuss new measure to ensure that councils restrain their activities and are required to reveal their funding sources in a coherent way", Mr Nicolson concluded.
For further comment:
Don Nicolson, Federated Farmers President, 027 226 6331
