Business-like councils good for rate payers and business

Requiring councils to behave in a business-like way is common sense and long overdue, said Michael Barnett, Auckland Chamber CEO.

He was commenting on Local Government Minister Rodney Hide’s announcement of Cabinet sign off to amend the Local Government Act to require councils to have ‘particular regard’ to core services and work within a defined budget.

The Chamber has long been concerned over the way councils have ignored repeated calls by successive governments, the Reserve Bank and many other organizations to keep annual rate rises within inflation, said Mr Barnett. “With the latest round of rate rises and councils spending plans continuing to be well above inflation, despite the recession, it was inevitable that the Government step in with action – they would have been irresponsible not to.”

“I am confident that most rate payers will welcome greater certainty over more reasonable local government cost rises when these measures are eventually passed into law,” said Mr Barnett.

He noted that the Government had ruled out privatized services as a principle, but welcomed the initiative to allow the private sector to compete more openly for councils’ commercial services. “Rate payers can only benefit from commercial services delivered by the private sector if it is clearly established they can be provided at less cost than council can,” concluded Mr Barnett.