Chris Hipkins told a conference of more than 600 local government and industry leaders in Rotorua on Thursday that local government has been made a scapegoat for the Government’s own choices, and used the speech to widen Labour’s proposed ratepayer loan scheme so it covers rates bills and development contributions as well as solar panels. The announcement at Local Government New Zealand’s SuperLocal conference drew immediate praise from the council lobby and a sharp response from the Taxpayers’ Union, which said Labour’s answer to unaffordable rates was to put them on the mortgage.
The Labour leader’s speech, reported by Local Democracy Reporting for 1News, was the most direct attack on the Government’s handling of councils in the campaign so far. “Local government has been used as a scapegoat for the current central Government’s poor choices over the current term,” Hipkins said. “For the past three years, we’ve seen a Government that has been far too focused on treating councils as a political punching bag, blaming local government for problems that it hasn’t properly funded, demanding more whilst providing less.”
He told delegates the relationship between Wellington and the country’s councils had deteriorated over the term, and that councils had been handed more work without the money to do it. “You can’t demand better roads, better pipes, more housing and better services whilst squeezing the funding that’s available to pay for those things,” he said.
The most pointed section dealt with the Government’s rates cap. The Local Government (Rates Capping) Amendment Bill passed its first reading on 1 September, with Labour voting for it so the bill could go to a select committee, and the Greens and Te PΔti MΔori opposed. The bill would require councils to keep annual rates rises inside a band of 2 to 4 per cent from 1 July 2029, with fees and charges excluded and exemptions available for councils responding to natural disasters. Simon Watts, the Local Government Minister, confirmed in August that the average household saving would be about $34 a year. “$34 is a savings for households, which is not immaterial. But the important thing here is around certainty,” he said at the time. The bill will not progress further until after the 7 November election, so whoever forms the next government decides whether it becomes law.
Hipkins told the conference Labour’s support stopped at the first reading. “We shouldn’t pretend that an arbitrary limit can substitute for a serious discussion about local government funding,” he said. Asked what Labour would offer instead, he said “everything should be on the table”, including giving councils new revenue tools such as visitor levies. National ruled out a bed tax in August and has instead promised councils a share of the existing International Visitor Levy.
The concrete policy in the speech was the expansion of the Ratepayer Assistance Scheme. Labour first adopted the scheme in July as part of its SolarSaver package, where it would offer long-term, low-interest loans for solar panels and batteries that are repaid through rates. On Thursday Hipkins said a Labour government would implement the full scheme, which LGNZ describes as having three parts. Homeowners could postpone their rates until they sell their house, developers and homeowners could pay development contributions over time instead of up front, and property owners could borrow for upgrades such as solar. The loans would be secured against the property, repaid through a levy on the rates bill or on sale, and run for up to 20 to 30 years for some products. LGNZ says the interest rate would typically sit 2 to 2.5 percentage points below bank floating mortgage rates, and that it could be operating within 12 to 18 months of legislation passing. A review panel made up of Nelson Mayor Nick Smith, economist Cameron Bagrie and Stuart Henderson has examined the business case.
LGNZ’s chief executive Scott Necklen welcomed the commitment within hours and asked every other party to match it. “LGNZ has been working to get cross-party political support for the RAS to ensure this ready-to-go cost of living solution is implemented quickly,” he said. “The RAS will considerably help households battling cost pressures by providing them the choice to keep more cash in their back pocket and lower the cost of their interest repayments on a new house.”
National has backed a narrower version of the same idea. Its Home Energy Fund, announced in June, would lend for solar, batteries and insulation and be repaid through rates, and Watts said at the time it was inspired by LGNZ’s scheme. The difference after Thursday is that Labour would extend the loans to the rates bill itself and to development contributions, which is where the Taxpayers’ Union took aim.
“Chris Hipkins’ answer to unaffordable rates is to help you go into debt to pay them. Councils get their money upfront, while ratepayers are left with a loan secured against their home,” the union’s spokesman Josh Van Veen said in a statement. “Postponing a rates bill doesn’t make it smaller. It means paying later, with interest.” The union also criticised Labour for not committing to a rates cap, which it says is the only thing that forces councils to control spending.
Labour’s local government spokesman Tangi Utikere told the conference the fix was a more collaborative relationship rather than a limit set from Wellington. “Taxpayers are ratepayers. We are talking about the same individual here, and you’re elected, we’re elected,” he said.
The speech landed on a day LGNZ had prepared for. That morning it released polling by Curia Market Research showing 66 per cent of voters think central government should pay for the costs it imposes on councils and ratepayers, against 11 per cent who disagree and 23 per cent unsure. Asked who should decide how local government is reformed, 47 per cent chose councils or residents, 16 per cent the independent Local Government Commission and 19 per cent central government. The poll of 1,000 likely voters ran from 1 to 5 October with a maximum sampling error of 3.1 percentage points. A separate LGNZ poll released a day earlier found 54 per cent of people trust their council to make decisions and 24 per cent trust central government.
LGNZ president Rehette Stoltz used the figures to press every party on the Government’s Head Start reorganisation of councils, which has been paused since September. Councils in the Wellington region spent $250,000 on the process before it stopped, she said, and Tasman District Council estimates spatial planning under the new resource management laws will cost the equivalent of 1 to 2 per cent of its rates revenue. “Councils want to be part of the solution, but local government reform has to be built to last. It must also be locally led,” Stoltz said. “Addressing the significant costs that governments over time have passed onto ratepayers for their policies needs to be a top priority for the next government.”
Rates are a live issue in this campaign because councils argue they are funding about a third of the country’s public infrastructure from about a tenth of the total tax take, a point Stoltz made when the cap was announced in August. The Government’s answer is the cap. Labour’s answer, as of Thursday, is to let households and developers spread council charges over decades and to keep talking about new revenue tools. The first day of the conference showed where the smaller parties sit. The Greens’ Mike Davidson called a rates cap “a blunt saw” that “will not work”, Opportunity’s Sarah Lucas said her party would abolish rates caps, and ACT’s Simon Court said more money could not be the only answer. Watts was scheduled to address the conference on Thursday afternoon.
Voting opens on 26 October. If rates and council funding matter to how you vote, you can compare every party’s local government policy against your own views with the NEWS WIRE voting tool.
Should ratepayers be able to postpone their rates and development contributions as a loan against their home, or would a hard cap on rates rises do more for your household? Tell us in the comments.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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