Rebate policy is a disgrace

Mike Yardley is predictable if nothing else (May 19) when he argues for the council’s Central City Development Contributions Rebate policy to be continued. He has previously demanded the Christchurch City Council slash costs with a 0 per cent rate increase but believes the council should see its policy of corporate welfare for inner-city property developers as essential spending. That’s a mix of fat council handouts for property developers but austerity for the rest of us.

The council’s inner-city rebate, along with the arguments supporting it, are a disgrace. It has cost Christchurch ratepayers $12.9 million since 2014 with a proposal before council last week to increase this by $7.1m. The ‘‘evidence’’ the mayor and chief executive have used to justify it is in six interviews with property developers who, surprise, surprise, love the policy. The suggestion that any of the properties which received the handout would not have been built otherwise is based on flimsy anecdote.

We all know hard decisions need to be made about council spending but why are property developers allowed at the front of the queue to get their hands on our money before the council makes tough decisions to cut funding elsewhere based on a forthcoming rewrite of the city’s annual plan? These developers should have to front up and make their case for funding like everyone else.

Yardley writes somehow this isn’t a handout because it doesn’t come from the council’s operational budget but is ‘‘debt-funded from the capital budget’’. So what? The simple truth is that this is $12.9m which would otherwise be available to council to reduce the rates burden on all of us.

He goes on to say ‘‘the developer doesn’t actually pocket the dosh’’ and quotes Cr James Gough: ‘‘Remitting a development cost simply makes central city housing more affordable and more competitively priced compared to noncentral options.’’ Yardley tells us ‘‘the average rebate is $12-15,000 per residential unit, enabling the sale price of the average new dwelling to be sharpened from $510,000 to $495,000’’.

There is no evidence to support this but in any case why should Christchurch residents have to pay to assist developers selling their properties in the inner city? Encouraging people to live and work there has already come at astronomical expense to taxpayers and ratepayers with much more to come. The convention centre, the metro sports facility and the proposed rugby stadium would be the three biggest.

Ratepayers and taxpayers have already done more than their share of spending in the inner city – it’s time for private sector developers to do their bit, without more handouts.

It has even been suggested by some councillors that buyers of these properties receive a rate-free period to make the deal sweeter. Strategies based on ratepayer subsidies for private profit-driven developments are a short sugar-fix for developers which bring long-term problems. The fact that a social housing project has received a rebate is no reason to justify the policy – it simply means an exchange of money between central and local government without an overall cost to Christchurch citizens.

Much more egregious is the council policy of refusing to put a single ratepayer dollar into the council’s rental housing, which left the city over 400 units short of what we had before the earthquakes. The council has borrowed the money and lent it to its housing trust, at commercial interest rates, to rebuild these units – many years after they were needed. So while there is no ratepayer money to build housing for low-income tenants and families, there are millions to subsidise building flash new private apartments in the inner city. This is morally and ethically wrong.

It should have been the first policy spotted by Mayor Lianne Dalziel, who says she is ‘‘laserfocused’’ on saving money. Chief executive Dawn Baxendale has made similar comments.

The inner-city rebates policy must go.