You will have seen the signs. Rates restraint. Rates reduction. Stop rates’ rises. The majority of people who say anything about the local body elections want to talk about rates. A lot of the people standing for councils promise to get tough on rates. Telling us horror stories about rates rises that amount to thousands of dollars.
So what are rates for? They’re a local property tax based on the value of your home that go towards funding services in local councils. If you’re renting, your landlord will likely have taken the rates they pay into account when they charge you rent. If you are in a house, owning or renting, you are contributing towards rates.
Unless you live under a rock (thereby paying no rates), you will know that rates have gone up and will continue to go up. In most places, they seem to have gone up quite considerably. In our house, this year’s rates are a few hundred dollars more than last year’s rates. And the argument is that the council needs the increase because it is costing them more for infrastructure, for services, for projects, for pretty much everything.
Councils are keenly aware of the balancing act between needing more funding to deliver what people expect and the public backlash over having to pay more in their rates. And they are not lying to us when they say their costs are rising. They genuinely need the money. Yes, there are people in councils getting paid more money in a year than many of us will see in 10 years, but that is not the reason behind rates rises. The reason is that you and I have become used to a level of services and infrastructure in our cities and towns that cost a lot, perhaps too much, to maintain and renew.
So how are we going to pay for this all? This is the question you will hear at local body conferences. For what it is worth, here’s a few crazy ideas of my own:
- Metered waste: in Tauranga, we have water meters. For those of you in Hamilton, fear not, they’re not so bad. What about if the council metered grey water and sewerage that left a house as well? There’s obviously an infrastructure cost to put any meter onto an existing system, but perhaps it is possible. If it was, then household rates could reflect the real amount of waste the council is having to process.
- Toll the roads in cities: roading is expensive. Really expensive. But we don’t think about that much. We just drive around, whether it’s one kilometre or 50 km a day. And all of that driving degrades our roads so that they are in a constant cycle of needing repairs. You may have seen the toll road north of Auckland with its fancy structure you drive under that captures your number plate and charges you. What if we had those on every main route in cities, and attempted to capture how much people were driving, and charge them for it? It would encourage less driving and more public transport, bike riding and walking, and hopefully reduce the impact on our roads.
- Set up cargo hubs on the edges of cities: we get big trucks in our cities and towns. They are wonderful at destroying roads. A lot of what they bring is goods for us to consume. We could establish cargo hubs on the edges of cities where our large trucks and trains unloaded. Then we could have a maximum tonnage on vehicles travelling into cities, as smaller vehicles could disperse said goods.
- Work nine days, get paid for 10: in the past, many of our public projects relied heavily on volunteer labour like the Lions and Rotary. You see the libraries, pools, and parks they built. Today, people don’t generally get involved in volunteering, because they’re too busy. Councils could offer a discount on business rates to those businesses who paid their employees for 10 days, but only required them to work nine in a fortnight, with the prerequisite that those employees contributed that extra day to volunteering on public projects.
- Budget with communities: when the Greens got onto the local council in Sao Paulo, Brazil, they took budgeting for the council out to the community. There’s not reason we couldn’t do that here. There is a certain level of expenditure that must happen in each neighbourhood. But then there a whole range of decisions that are made by the council about what they’ll spend money on in a neighbourhood. Community meetings could be run where the council asks neighbourhoods what their priorities are, and what services they would rather do without to see a reduction in their rates.
- Own assets, run businesses: Councils have been in the habit of following the neo-liberal ideology that efficiency and effectiveness requires them to sell assets and privatise their functions. Let’s just admit this has failed miserably. Councils need to own assets and run businesses. Well-run businesses that don’t just service the council but the wider community can bring funding to councils, and having assets provides something against which capital for projects can be raised.
- Provide to a level, charge for the rest: we have a lot of subdivisions in Tauranga. You may not have noticed. Often a developer will put in lampposts, footpaths, roads, green spaces, and trees that look great, but cost the earth to maintain. Then they sell their properties and walk, leaving the council to meet the inflated expectations of residents. Tauranga City Council have worked on trying to address this in the last 10 years, pretty successfully. I’m suggesting that the council communicate to developers that they will provide an infrastructure to a certain level; anything above or beyond that is their responsibility, and if they sell, they need to communicate clearly to residents in that subdivision that maintenance of services about the level the council is offering will be their financial burden.
I doubt any of these ideas are new. Some of them are probably not viable. Some of them might be genuinely unhinged. But we need to start having this conversation. Councils are on a losing wicket with the current taxation system. We cannot afford what we currently have going forward into the future. So let’s figure out how we are going to split this bill.