Why isn’t local government tightening its belt?
At a time when the Government is seeking to slash $1.5 billion in annual public service spending, is the local government sector living in a parallel universe? Where’s the belt-tightening? Are they tone deaf, aloof or just bloody-minded?
Thirty-six Crown agencies and government departments are expected to identify savings options of either 6.5 or 7.5% to their baseline funding.
Thirteen such entities have swelled their ranks of fulltime equivalent staff by more than 50% in the past six years.
In stark contrast to the sweeping efficiencies drive from central govern ment, primarily geared at getting the nation’s financial house in order and slaying inflation, Planet Local Government stands accused of stoking “greed-flation”.
Central government is focused on renewed fiscal discipline and easing costof-living pressures, but local government spending continues galloping out of control. As the draft Long Term Plans (LTP) for the Christchurch City Council and our regional council Environment Canterbury (ECan) gear up for public consultation, ratepayers are facing a double-decker financial mauling. The city is proposing a 13% average rates rise, while ECan is touting a 24% annual hike.
Without a major course-correction, the average Christchurch ratepayer is facing having an extra $600 sucked out of their bank accounts by these two councils in the next 12 months.
I’ll have more to say about encouraging rates restraint from the city council in coming weeks, but ECan’s monstrous rates rise is particularly gratuitous, though perhaps I should be grateful. Their starting point was a 34% hike! ECan chair Peter Scott says the proposed rate rise reflects “the impact of inflation, central government mandates, climate change resilience, ambitious public transport plans, and a desire for better biodiversity outcomes”.
There’s no doubt that recent legislative and regulatory directives, like freshwater management, heap higher compliance costs on ECan’s operations, forcing them to foot the bill.
Scott points out they’ve hired 200 extra staff to fulfil legislative changes. Central government needs to recognise that inherent unfairness and help bankroll those financial consequences.
But that doesn’t fully account for the explosion in spending, which sees ECan’s 2024 budget jump from $270 million to $346m. Much of it is discretionary – not driven by directives, but desires. ECan’s draft LTP proudly trills, “We have made the bold decision to do more for our environment and do it faster.”
Public transport is the key driver, with ECan aiming to double funding over the next decade. Nearly half of this year’s annual $346m budget is devoted to public transport.
I canvassed some views from two Christchurch regional councillors, Deon Swiggs and David East. Swiggs says we have “a crap public transport system” that requires big investment to make it fit for purpose, which “people will hopefully want to use”.
East says he has huge concerns about “the value for money of public transport” when only “3-4% of the total population regularly use it”.
My beef is that even if you support substantially upgrading public transport and super-sizing service frequency, why is the passenger virtually getting a free ride?
Of the $160m annual transport budget that ECan is proposing, just $14.5m will be funded from fares. Public funding is picking up 91% of the transport tab.
Swiggs concedes “that burden needs to be addressed. The user should be willing to pay for a regular and reliable service.”
Meanwhile, both are incensed by central government calling the regulatory shots, but passing the buck. Swiggs cites the wildling pine programme. “We’re required to continue this work under the Government’s biodiversity standards, but they’re cutting the funding.”
East argues “we need government to deliver policy that has less restrictive provisions, and less over-the-top engagement with ethnic groups”.
Can the 24% rates rise be stopped? East says ECan needs an efficiency drive, but he has “little faith” in the consultation process because “we hear from the same old serial submitters”.
Both councillors believe the local government model is broken. Swiggs claims there’s too much duplication, while East believes the transport portfolio should be ceded to territorial councils, with ECan principally transforming into a water regulatory authority.
But the new Government is showing no appetite for restructuring local government.
Mike Yardley is a Christchurch-based writer on current affairs and travel