Increases impact on ratepayers

Local authority rates increases beyond the rate of inflation impact on all ratepayers but have a greater impact on low income earners and retirees – in particular those who own their own homes but rely almost entirely on superannuation for their income.

Grey Power Associations throughout New Zealand are reporting large numbers who can be described as being ‘‘asset rich but cash poor’’.

It is often argued that the solution is to sell the home and downsize but the reality is that they are often buying and selling in the same market, and when all expenses and other factors are taken into consideration there is little advantage.

The Invercargill City Council rates increases exceed the rate of inflation and are projected to continue into the future.

This year properties have been re-valued and this changes the base for rates calculation.

In my situation, for example, the capital value of our townhouse in a retirement village has risen by $55,000.

Having had a bit to do with council over 18 years, I can appreciate the need for much of the council’s expenditure but question why increases aren’t cushioned by greater dividends from council-owned companies.

Electricity Invercargill recently announced a profit of $89.5 million, with some of its profits coming from increased line charges.

Invercargill ratepayers are also consumers so reasoning suggests that the consumer is paying more to increase council-owned Electricity Invercargill profit to pass to Holdco to then pass some back to council.

Electricity for many on low incomes has become a luxury item.

Many complain that despite saving on power, line charges are the real problem.

Is this not understood by directors?

What influence do councillors appointed as directors to council-owned companies have?

Do they fully consider the impact on the ratepayers when making their decisions?

Do councillors thoroughly study their own council-owned companies’ Statements of Corporate Intent to ensure the direction the companies take fits with the objectives of the council?

Was the purpose of the forestry company to buy forests in Marlborough and to enter into the dicey deal with the Manawatu?

Perhaps it’s time to ditch Holdco, pay taxes and forget about imputation credits and creative accounting, and to bring al profits directly back to the council, thus minimising rates increases.

Geoff Piercy

Life Member/Past President, Grey Power Southland relationship with both institutions.

Janice Gill