Imagine for a minute a bizarre parallel universe in which institutions of government were so perverse they refused to do things on the grounds they did not have sufficient funds. Free libraries for citizens? Yeah, that would be wonderful, but--Nah, we can't afford it. Next. Clearly such behaviour would indicate derangement by all concerned.
Consequently, in our more sane world, local government has never let a lack of money stand in the way of new spending projects. That's what all government exist for, right? To spend more of other peoples' money. It was completely predictable, therefore, that as the pressure group, Local Government New Zealand (representing local and municipal governments in New Zealand) recently faced up to the unexpected crisis of no-money-left, it would come up with an equally unexpected solution. More money, please. They have thought long and hard about how local governments can extract more money out of the citizens to pay for all the big-spending, wonderful ideas and plans local governments are so adept at creating.
Local government has a revenue problem, not a spending problem--or so we are told. Ratepayers (that is, property owners) have reached the limits of their ability to pay more. There are murmurings of rates revolts. So now, local councils want new ways to tax and extract money citizens' money.
Today Local Government New Zealand released a funding review paper, claiming a need to address the gap between spending and revenue. Pointing to pressures from an ageing population as well as local pressures created by tourism and nationally significant projects, the paper mooted revenue gathering including from local taxes and cost sharing with central government.
How radical it would be for a local council or a city government to have an approach which divided spending into two categories of "have to have" and "nice to have". Even more radical for councils to be restricted to funding defined essential services, and funding the "nice to have's" only if additional funds were actually available for the latter. And even better if councillors and senior council management staff were required to sign a lien upon all their personal, family, and in-trust assets to be turned over to the council if any council failed to fund the essential services.
"The goal is not to increase the overall tax burden for New Zealand, but rather to determine whether a different mix of funding options for local government might deliver better outcomes for the country," LGNZ president Lawrence Yule said. According to LGNZ, councils spent about 10.5 per cent of all public expenditure, but raised only 8.3 per cent of the revenue. "As a result, a growing number of councils face financial challenges at a time when demand for infrastructure and services is greater than ever. Local government is also an important contributor to economic growth but the right incentives and resources must be in place to drive this growth," Yule said. [Stuff]
If such a convention were required, we confidently predict that councils would never have either spending or revenue problems. Saying, "No" on the grounds that there was no money available would become commonplace. And within a short space of time, we predict, local councils would be far more respected by citizens, since most of them have to operate under the same budgetary constrictions and fiscal disciplines. Why should a body representing citizens be any different?
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