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Government proposed law change lets councils off financial leash

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Apr 13 - The Government has introduced a new bill to remove the last remaining fiscal restraint on local councils.

The Local Government (Community Well-being) Amendment Bill changes the ‘purpose’ of local government, removing reference to the core functions of councils and, incredibly, removes the requirement that councils deliver services "in a way that is most cost effective for households and businesses".

Law changeIn short, the clear requirement for councils to be ‘cost effective’ is being replaced with a wishy-washy provision that councils promote the ‘well-being of communities’.

This change is very significant. In reviewing councils' decisions, courts look to the purpose provisions. We are aware of many examples of local government spending proposals that did not happen because councillors were given legal advice that a judicial review may invalidate the decision because it is not 'cost effective'. Removing the provision lets councils off the leash.

Local Government New Zealand – the ratepayer-funded lobby for councils – is "delighted" about the change. Little wonder: it will allow councils to, for example, hike salaries without increasing output, or spend ratepayer money on 'cultural investment' without budget constraints or cost-benefit analysis.

So far, the media has been AWOL on this issue, and the Bill passed its first reading this week without a hitch.

We won’t let the Government push through these changes without a fight.

In the coming months we will be making sure MPs get plenty of submissions from ratepayers about why local government needs more, not less, pressure to be efficient.

Ratepayers are sick and tired of being cash cows for local body politicians and bureaucrats promoting hobby horses rather than infrastructure investment and core services.

Councils are already bad at wasting time on non-core business – take Wellington Regional Council's submission of a motion to the Local Government NZ conference asking all New Zealand banks to get out of fossil fuel investments – the last thing councils need is more license to throw money at these sorts of causes.

Once Select Committee submissions are open, we'll launch an online tool for you to either endorse our submission, or submit your own to MPs. We'll keep you updated.


| A Taxpayers Union release  |  ||  April 13, 2018   |||