User Pays to blunt Rates Bills
The Christchurch water charging debate was floated, exploded and now unceremoniously dumped. Apparently our meters aren’t smart enough. It’s a bit of a black eye for the council’s finance committee chair, Cr. Raf Manji, who spear-headed the push, with the Mayor’s backing. But Lianne Dalziel has hastily surrendered, seemingly spooked by the firestorm of accusations that the council was cynically donning the cloak of water conservation to shamelessly orchestrate a new revenue stream. Other critics worked themselves into a lather over geese, ganders and goodness, demanding that dairy farmers be volumetrically billed for abstracting millions of cubic metres of Canterbury’s precious groundwater. If this proposal is to be wheeled out in future, some bottom lines should underpin it. First, the council cannot unleash a double-dipping regime, given ratepayers already pay a “water supply charge”, determined by their property’s capital value. The average annual charge is around $130. Secondly, that water supply charge needs to be lowered, if volumetric charging is introduced, beyond a basic provision of 300 litres, per property, per day. Aside from being virtuous about water conservation, the economic imperatives do stack up, if water efficiency relieves pressure on the operating and capital costs of supply infrastructure. If you want to thoughtlessly saturate your garden throughout the heat of the day, or transform your driveway into a lazy river while washing the car, fine. But there should be a price to pay for such wanton wastage. Dove-tailing with the water debate, Local Government New Zealand ( LGNZ) is dreaming up new ways of milking you, with new funding mechanisms. Cr Raf Manji is a member of the working group. It is profoundly disappointing that LGNZ’s Funding Review discussion paper, fails to recognise that local government spending is running rampantly out of control. Instead of confronting their ballooning fiscal obesity and curbing the binge-behaviour, LGNZ is floating a wish-list on how to pump you for more, even though the average rates bill in New Zealand has more than doubled in the past twenty years. In Christchurch, average residential rates increases have outstripped the rate of inflation by up to 7 times, in recent years. The city council is already dangling the spectre of rates rising by 45%, in the next five years. This is demonstrably untenable. Given the perversities of the capital value-based rating system, councils’ should make far greater use of the annual uniform charge, to help override those kinks. Plus, beyond the basic provision of core council services, expanding a user-pays approach for discretionary services, like excessive water use, would help blunt rates bills.
Mike’s weekly current affairs opinion column, as first published in The Press. Feb 10. http://www.stuff.co.nz