Council welcomes Rating Inquiry Report

The Government-commissioned Rating Inquiry Report is a timely beginning to find appropriate solutions for local government funding, according to Manukau City Council Finance Director David Foster

The review panel yesterday released a 300-page report containing 96 recommendations, and it will take some time to analyse the reasoning and explanations behind the recommendations.

“Overall, it appears the panel has made some positive recommendations that reinforce the direction our council has been promoting for local government funding,” Mr Foster says.

“There are also some that are likely to add to more process and bureaucracy to council operations.”

Several of the recommendations take another look at issues that have been raised in previous reviews of the local government sector, some of which go back more than 50 years.

These include removal of rates exemptions, improved accountability mechanisms, balancing budgets and equitable funding, and bases for rating and Uniform Annual General Charge levels, as well as differential rating.

There is significant scope for improvement in local government accountability, Mr Foster says.

“The council is working in conjunction with SOLGM and LGNZ on improvements that will flow through into the 2009 Long Term Council Community Plan.”

“However, the accountability of the sector has improved over recent years. The difficulty of these issues are, to some extent, reflected in the report’s recommendations, which suggest removing mechanisms put in place in recent legislation (2002) to achieve the very objectives that the inquiry believes warrants their removal.”

The council supports:

Rating exemptions being a matter for council policy rather than legislation
Increased funding from government
Council entitlement to set all regulatory fees on an actual and reasonable cost basis
Further central government research on rates and affordability
Recommendations on the rates rebate affordability

The council has concerns about the implications of:

Further changes to accountability requirements only two years after recent changes have taken practical effect.
More additions to the Long Term Council Community Plan, which is already a large and difficult document for people to understand
Recommendations that increase central government-imposed bureaucracy on local government
Recommendations which erode the role of elected representatives in making policy decisions impacting on their communities.

The report has also quoted average rates levels for various councils.

“We have not determined what the basis of the averages is for their calculation. We intend to examine this further, as we cannot reconcile the figures in the report to our own calculations for rates in Manukau,” Mr Foster says.

The council will continue analysing the report and the potential effect of the recommendations, were they to be implemented.