People often say they want politicians to be honest. Sometimes that means saying things that they don’t want to hear. That is especially true when it comes to rates.
People don’t need to be told that costs are going up. They see it every time they shop for groceries or get a tradie to fix something. The same is true for council. For the things that council spends most of its money on, like construction and maintenance, inflation is even higher than for households. It probably costs council about twenty percent more to do things this year than last.
It’s not just inflation. Storm damage is increasing. Climate change means we need to spend more each year to fix things up, and spend more money on making our infrastructure resilient for the future. In addition, years of underfunding has meant that there is a large unpaid bill looming. For example waste water pipes in Edgecumbe have remained cracked since the ’87 earthquake and that is causing problems with storm water infiltration into the system. That needs money to fix.
Councillors in the past have at times been more focused on minimising rates rises than doing the work needed. You can understand why. Voters tend to elect people who promise to keep the rates down, and don’t always ask how they plan to do that. Often it’s by making short sighted decisions. An example is Whakatāne town’s water supply. It could have been secured for a moderate additional amount of money when the bore went in at Paul’s Road many years ago but wasn’t, to avoid a rates rise. That decision has led to much bigger costs to try to find a new supply, and we are not even there yet.
In addition to all that, central government is constantly adding new responsibilities to councils but without providing the funding to pay for it. The job of local government is getting bigger all the time.
Plus health and safety now requires two people to do some of the things that used to be done by one, especially people working in remote places, so as to ensure there is back-up if anything goes wrong.
What do we do? We can cut services, but to make any real impact we’re not talking about a planter box here or a painted line there. We’re talking about significantly cutting services – closing libraries, shutting down swimming pools, or the airport, letting our local roads deteriorate (as Waka Kotahi has been doing with State Highways). Council staff have been trimming costs where they can, or deferring projects to smooth out spending, and that has helped keep rates rises below 10%, but no elected council member has supported taking a chainsaw to council services.
Actually, the main way that rates rises have stayed below 10% for next year is borrowing. It’s not an approach I’m happy with. Borrowing to pay for intergenerational infrastructure is a good strategy, but borrowing just to cover the bills is a recipe for long term trouble.
The question that councillors had to decide this year is whether to borrow more money and stay with a 6.3% increase, or borrow a bit less for a 9.5% increase. Ease the financial pain for people now, but with even more pain next year when we have to make up the shortfall, or bite the bullet now to avoid cementing in bigger rates increases in the future.
It was a hard decision. We all know that people are struggling to pay bills as it is. No one wants to add more financial hardship than necessary, but whatever happens those costs are not going away.
In fact by pushing them into the future, they just get bigger. That does no one any good.
Published in the Whakatane Beacon 16/6/23
Monkey Business 