If National is re-elected, the new regime will begin influencing council long-term planning from next year, with the caps taking full effect in 2029. The target range will be reviewed every six years to reflect changes in costs outside councils' control.
Councils
will be able to apply for time-limited exemptions in exceptional circumstances,
such as natural disasters, or where they can demonstrate that operating
above—or below—the range represents prudent financial management.
Water
services will be excluded from the cap and regulated separately.
We
think it is pointless capping rates without also constraining council debt. Spendthrift
councils could avoid making difficult spending choices by borrowing more to
fund expenditure. That may keep rates within the Government's cap in the short
term, but the debt—and the interest bill—will eventually have to be paid. They
will simply shift the problem from today's ratepayers to tomorrows. If the
Government wants to impose genuine financial discipline on councils,
controlling rates is only half the equation. Council debt needs discipline too.
FURTHER INFORMATION
Beehive Press Release: HERE >>>
NZ Herald: HERE >>>