Andrew Little at his mayoral campaign launch in Wellington on 17 May. Photo: RNZ / Samuel Rillstone
A former Labour leader running for Wellington mayor says a cap on rates would only reduce accountability and undermine the relationship between councillors and residents.
In an interview with RNZ this week, Finance Minister Nicola Willis reconfirmed the government was looking into "capping" - putting a hard limit on - council rates increases, saying it would get pushback from councils "because when you take candy away from kids in a candy store, they don't really like it".
Labour's leader Chris Hipkins and councils' representative group LGNZ both pushed back, saying rates capping would in fact worsen the situation.
Hipkins also argued the big rates increases seen in recent years was a result of the government scrapping Labour's three waters reforms, later labelled the "affordable water reform".
Local Government Minister Simon Watts told RNZ the rates cap policy review was yet to be presented to Cabinet, but confirmed there would be announcements about it later in the year.
"We're taking our time to make sure that the policy design of that mechanism is fit for purpose, importantly as I've said before taking on board also the learnings particularly in Australia where this has been implemented to make sure that we've learning from that experience."
Former Labour leader Andrew Little has thrown his hat in the ring for the Wellington mayoral race this year, and said while rates did need to be better controlled a hard cap would reduce accountability.
"A lot of people are really concerned about the level of rates rises. I mean, here in Wellington, we've seen rates rises of 30 percent over a two year period, which is unreasonable and is wrong," he said.
"But at the end of the day, mayors and councillors are responsible for making the financial decisions."
A cap would reduce accountability and responsibility, he said, and undermine the democratic relationship between mayor and councillors and their residents.
"Mayors and councillors, every election, they are accountable to their people for the decisions they've made and if they've made bad decisions they're going to be responsible for that - that gets dealt with at the ballot box. If you take away ultimate responsibility for those decisions, then where do residents - as electors of mayors and councillors - go?"
"Coming over the top with a central government mandated sort of decision isn't an answer to that requirement, and the problem that goes with councillors and mayors who get out of control and spend wrongly and irresponsibly."
Pointing to Wellington's Town Hall upgrade, he said councils sometimes did need to say no to projects, "and I think in Wellington they haven't been, and it's making cities like Wellington unaffordable ... councils, particularly Wellington City Council, has to show much greater control over its financial decisions".
He had a different stance from Hipkins on three waters, saying that while historical under-investment in water systems would end up costing, but "just scrapping three waters alone I don't think can be held responsible".
"There's partly catch up on water stuff. The real impact of the current water reforms is yet to be seen."
Minister Watts said rates capping was one mechanism the government was considering to "ensure that the money that is being collected through rates is spent appropriately," but not the only one.
"We're also going to be releasing and publishing transparency reporting around councils' financials and also introducing legislation in regards to changes around what councils focus on. So it's a suite in a package of interventions that will get us to a more sustainable local government."
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