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Otago Daily Times
3 days ago
- Business
- Otago Daily Times
‘Scary' 30% rates rise on cards
Councillors hear an update on Local Water Done Well proposals at a workshop this week. PHOTOS: ANDREW ASHTON Ratepayers could face a "scary" 30% rates rise in just two years if the Waitaki District Council's plans for an in-house water services unit are accepted. That was the stark reality laid out for councillors at a workshop this week to plan how to move forward from a decision two weeks ago to opt out of a joint water entity with three other Otago councils. Mayor Gary Kircher said he and the rest of the council were committed to making the best of that decision, which now involved sending a draft plan to the government by the end of July, before a full water services delivery plan (WSDP) was presented to the Department of Internal Affairs in September as required by the government's Local Water Done Well legislation. "We have to make sure that we do set up our in-house option as best as possible and I won't tolerate anyone undermining that." However, the size and cost of that was put into perspective by two Department of Internal Affairs (DIA) representatives at the workshop. They reiterated their points from a previous meeting that the in-house model would have to meet the government's financial stability rules for a period of 10 years, even if the plan involved a joint venture with other authorities before then. The in-house model would have to stand on its own merits for a 10-year period for assessment purposes. If those rules were not quite met, a facilitator could be appointed to work alongside the council to help the plan meet the targets. Department of Internal Affairs representatives Marlon Bridge (left) and Warren Ulusele at the workshop. The other, "more intrusive" option was to send in "the specialist", DIA representative Warren Ulusele said. "That person is appointed in the council, they make decisions on behalf of the council. They can look up across the council finances, potentially look to redirect funding from other purposes and redirect it back into Three Waters investment. "They can look at the revenue streams and determine that they need to go up. So I point that out, not in a threatening way, but just to be absolutely clear about this conversation around control and that's concern, again, not just this council, consultation across the country and it's understandable. "That person is appointed by the minister with one objective and that is to develop a financially sustainable plan. They will look to do that as quickly as possible and their focus is meeting growth. So they're not looking across the range of responsibilities you have, the range of considerations you have." WDC chief financial officer Amanda Nicholls then laid out the council's finances saying they would look "scary" at this stage of the process, pointing out external debt per rateable property would significantly exceed the benchmark of $4000, while debt continued to grow over the years. However, it would require a rate rise of about 25.61 % in the 2028 LTP year to fund the in-house unit, and then rate rises of about 4% for each of the following years. All those rises and the 2028 rise could also increase by a further 5% if the council, as was likely, was required to fund depreciation of water assets. When it came to council debt, the workshop heard the WDC would breach its debt cap in 2035 and every year thereafter, potentially requiring further rate rises to lower it. Two weeks ago, Waitaki district councillors voted to exit the Southern Water Done Well partnership with Clutha, Central Otago and Gore in favour of an in-house water services delivery unit. The joint arrangement was previously the council's preferred option before it was put to public consultation. Public consultation across the four councils drew in over 1000 submission with the in-house business unit model the preferred option in Waitaki (54%) and Clutha, while only 26.7% supported the joint entity, most popular in Gore and Central Otago. Prior to that the Department of Internal Affairs said joining a four-way, multi-district water company was the "only viable option" for the district. The DIA representatives this week said they had heard nothing to allay their "concerns" over the council's chosen path, saying they could not see a pathway for the council to develop a plan that was credible. "Hopefully, it'll come to light as you uncover more of what information discloses as you put more of the facts into the equation." The council intends to hold weekly public workshops, videos of which will be posted on its website, every Tuesday this month to keep people up to date with progress. A recording of this week's meeting, with chapter points for each section, the presentation given by the council's finance team, and the letter from the DIA are all available on the council website. "Council encourages the community to watch the videos, read the presentation and the letter from the DIA to be fully informed about the development of the WSDP," a council statement said.
Scoop
6 days ago
- Business
- Scoop
Waimakariri In-House Water Plan Approved
Waimakariri's water services structure has been given the green light. The Department of Internal Affairs (DIA) has given the tick of approval to the Waimakariri District Council's water services delivery plan, which will see the council beef-up its in-house business unit in line with the Government's Local Water Done Well legislation. Waimakariri Mayor Dan Gordon said the decision was good news for the district, after the council consulted on its water services delivery plan as part of its annual plan consultation. The council received 764 submissions on the topic, with 97 percent in support of the council's preferred option. Mr Gordon said the council has invested in its water infrastructure over a number of years, which meant it was not going to face the same costs for upgrades as other councils were facing. ''Because of this, modelling of future costs has shown that in the first 10 years the best model for Waimakariri is an internal business unit. ''This provides certainty for the community and through a business unit we retain effective control and influence, which is what is important to the community.'' The council operates six urban drinking water schemes and five rural drinking water schemes, servicing around 21,500 urban, rural and commercial properties. It also operates two wastewater schemes serving around 18,800 properties, and five urban and seven rural stormwater drainage areas. Council staff said more than $100m has been invested in the district's water infrastructure over the last 20 years. The waters service delivery plan outlines the steps the council will make over the next 12 to 24 months to ensure the structure is aligned with the new legislation, with fully ring-fenced financials for drinking water and wastewater. Mr Gordon said the council has established operational relationships with the Hurunui and Kaikōura councils, and remains open to expanding these shared service arrangements. The Hurunui and Kaikōura district councils voted separately in May to form a joint water services council controlled organisation (CCO) in line with the Government's Local Water Done Well legislation. The two councils have now prepared a memorandum of understanding and a draft water services delivery plan which will be presented to their respective council meetings next week. The councils have both said the door remains open to Waimakariri joining their CCO. The Hurunui council supplies water to households in the Ashley and Loburn areas, while Waimakariri offers design and IT services to the Hurunui and Kaikōura councils' water units when needed. Under the legislation, councils are required to submit water services delivery plans to the DIA by September 3. Once a plan has been approved, councils have until June 30, 2028, to demonstrate they are financially sustainable.
Scoop
18-07-2025
- Politics
- Scoop
Local Democracy Under Threat? Officials Warn Against Removing Council 'Four Wellbeings'
Removing the "four wellbeings" for councils is unlikely to make much difference, and could even impact services and development, officials' analysis of the government's law changes shows. The report shows the approach taken by the government can be expected to overall improve clarity and concerns about spending "beyond core infrastructure" - but would undermine stability and localism. It shows the Department of Internal Affairs would have preferred to keep the status quo. The Local government (System Improvements) Amendment legislation passed its first reading last night, with the select committee reporting back in November. The government and the minister have made their views clear, stating that councils have "lacked fiscal discipline", that they "are not mini-Parliaments; they are service delivery agencies", and that residents have become increasingly concerned about rates. The opposition parties have argued it is a power grab that degrades the rights of democratically elected councils. Removing 'four wellbeings' to have little impact A key part of the bill is the government's proposal to remove all 10 mentions of the "four wellbeings" - social, economic, environmental and cultural - from the law governing councils. However, the Regulatory Impact Statement (RIS) on the bill from Internal Affairs said that in isolation, this change was "unlikely to benefit communities more than the status quo". "Previous regulatory impact statements have suggested that despite various changes to the purpose by successive governments, there has been limited impact on council decision-making, activities, and service levels, regardless of intended focus. "Refocusing the purpose of local government will likely have limited impact on its own and may create implementation costs and issues." The paper highlighted that the "proposed changes will likely disrupt the sector" and had led councils to do "costly compliance exercises in the past to determine which activities fit within a narrower purpose". Despite this narrowing, it said the purpose of local government "should reflect the broad range of responsibilities local authorities have under all primary and secondary legislation in New Zealand" - pointing to the 47 statutes councils already have responsibilities under. It noted that departmental feedback from agencies, including the Infrastructure Commission and the Ministry of Housing and Urban Development, as well as the independent Future of Local Government Review (FLGR) - effectively binned by the government a year ago - had "contrary views to those of ministers". "Feedback suggested that removing the four wellbeings could be seen as disempowering local government, and while focusing councils on low rates may succeed, it would likely come at the expense of key council services and infrastructure development." It noted the FLGR had found successive governments' changes to councils' purpose were disruptive, and recommended the four wellbeings be entrenched in law to provide greater certainty. Removing the wellbeings "could impact [Treaty of Waitangi] settlement arrangements between iwi or hapū and councils". However, some councils had told the minister, "they felt it would also help them to manage community expectations and do fewer things better". In a table assessing the costs and benefits of the legislation, the officials found that "restraint" (addressing concerns about spending beyond core services) and "clarity" (providing useful direction about what councils should be expected to do) were improved compared to the status quo. However, "stability" (minimising disruption and allowing councils to plan effectively) and "localism" (recognising the broad role of councils valued in communities and empowering them to decide for themselves) would be worse than the status quo. Effect on rate rises? The RIS suggested that other changes proposed by the government, including additional performance monitoring and rate capping, were "more likely" to support the government's objectives. While ministers have continued to say the changes are targeted at a lack of fiscal discipline by councils, the RIS stated "cost pressures on councils are being driven by capital and operating cost escalation, flowing from supply chain upheaval and a tight labour market during the Covid-19 pandemic, and accelerated headline inflation since". "Infrastructure costs have long been a major cause of rate increases, with councils needing to upgrade infrastructure, especially for water and wastewater treatment plants, and invest in more infrastructure to meet growth demands. "Around two-thirds of capital expenditure for councils is applied to core infrastructure, not including libraries and other community facilities, or parks and reserves." Local Government Minister Simon Watts, at the first reading speech on Thursday, said, "We looked at the evidence and it showed that whenever the four aspects of community wellbeing are included in the purpose of local government, rates go up as councils are focused on too many things". Internal Affairs' analysis showed rate increases were "about two percent higher when the four wellbeings are in the Act", so while it bears out the minister's statement, the effect cannot explain the full weight of rate rises across the country. The data used also did not account for population growth or distinguish between residential or commercial ratepayers. "Usually, where rates have increased faster, this is because costs for councils have risen faster. The current infrastructure deficit for local government is evidence of prolonged underinvestment, where rates (along with other revenue sources) did not increase enough to enable responsible asset management. "For example, despite rates appearing to increase more towards 2007, the Infrastructure Commission has identified the period from 1995 to 2008 as a time when rates were consistently below their post-World War II average as a share of gross domestic product, and this coincided with a deterioration of the stock of transport, water and waste assets." Limited consultation and scope for analysis, rates capping process uncertain The analysis stated that the minister only allowed officials to examine two options: the status quo and his preferred approach. "The data and evidence used in carrying out this analysis was generally low quality due to limitations on options exploration and consultation. "There was a heavy reliance on previous regulatory impact statements that covered the same or reverse law changes." The inclusion of the wellbeings has been added to or removed from the law four times since the Act came into force in 2003, so there were more than enough previous analyses to draw from. It remains unclear whether rate capping, which the minister wants "before Christmas", would be included in the bill after the select committee reports back in November. In a response to RNZ, the minister said decisions had not yet been made on whether rates capping would be added to the current bill, or in new legislation. "This week I confrimed that the government is exploring a rates capping system with policy work underway since Cabinet agreed in April. I will bring advice back to Cabinet for consideration later this year. I intend to progress work on a rate-capping system suited to New Zealand that is flexible enough to support our housing growth aspirations and which allows us to respond to the infrastrcuture deficit while limiting spending on nice-to-haves. "We want ratepayers to get value for money and with issues like average rate increases in 2024 of 9.6 percent vs CPI inflation at 2.2 percent , constraining increases is an option we are actively considering." However, the analysis repeatedly highlights that efforts to "limit council revenue from rates" are part of the government's intended package of reform, and a section laying out a timeline of changes includes a redacted entry that follows the implementation of the changes described in the bill. The disclosure statement prepared by the department noted that the RIS was limited to assessing the impacts of refocusing the purpose of local government. It said the Regulations Ministry had determined other aspects of the bill did not need to be assessed, "on the grounds that these proposals would have no or only minor economic, social, or environmental impacts". The ministry also asked the minister to provide an analysis on rates capping when reporting back to Cabinet on the overall bill in December. The statement also showed Watts had asked for consultation relating to transparency and accountability with the Free Speech Union lobby group, the Taxpayers Union lobby group, the New Zealand Initiative think tank, Transparency International, and other ratepayer groups and academics. On performance management, the department also sought feedback from a reference group, and on regulatory relief, the department was instructed to consult LGNZ, Local Government Professionals NZ, Federated Farmers, and Business NZ. Officials also shared a clause of the draft bill with the Local Government Funding Agency.
RNZ News
18-07-2025
- Politics
- RNZ News
Local democracy under threat? Officials warn against removing council 'four wellbeings'
Photo: RNZ / Quin Tauetau Removing the "four wellbeings" for councils is unlikely to make much difference, and could even impact services and development, officials' analysis of the government's law changes shows. The report shows the approach taken by the government can be expected to overall improve clarity and concerns about spending "beyond core infrastructure" - but would undermine stability and localism. It shows the Department of Internal Affairs would have preferred to keep the status quo. The Local government (System Improvements) Amendment legislation passed its first reading last night , with the select committee reporting back in November. The government and the minister have made their views clear, stating that councils have "lacked fiscal discipline", that they "are not mini-Parliaments; they are service delivery agencies", and that residents have become increasingly concerned about rates. The opposition parties have argued it is a power grab that degrades the rights of democratically elected councils. A key part of [ the bill is the government's proposal to remove all 10 mentions of the "four wellbeings" - social, economic, environmental and cultural - from the law governing councils. However, the Regulatory Impact Statement (RIS) on the bill from Internal Affairs said that in isolation, this change was "unlikely to benefit communities more than the status quo". "Previous regulatory impact statements have suggested that despite various changes to the purpose by successive governments, there has been limited impact on council decision-making, activities, and service levels, regardless of intended focus. "Refocusing the purpose of local government will likely have limited impact on its own and may create implementation costs and issues." The paper highlighted that the "proposed changes will likely disrupt the sector" and had led councils to do "costly compliance exercises in the past to determine which activities fit within a narrower purpose". Despite this narrowing, it said the purpose of local government "should reflect the broad range of responsibilities local authorities have under all primary and secondary legislation in New Zealand" - pointing to the 47 statutes councils already have responsibilities under. It noted that departmental feedback from agencies, including the Infrastructure Commission and the Ministry of Housing and Urban Development, as well as the independent Future of Local Government Review (FLGR) - effectively binned by the government a year ago - had "contrary views to those of ministers". "Feedback suggested that removing the four wellbeings could be seen as disempowering local government, and while focusing councils on low rates may succeed, it would likely come at the expense of key council services and infrastructure development." It noted the FLGR had found successive governments' changes to councils' purpose were disruptive, and recommended the four wellbeings be entrenched in law to provide greater certainty. Removing the wellbeings "could impact [Treaty of Waitangi] settlement arrangements between iwi or hapū and councils". However, some councils had told the minister, "they felt it would also help them to manage community expectations and do fewer things better". In a table assessing the costs and benefits of the legislation, the officials found that "restraint" (addressing concerns about spending beyond core services) and "clarity" (providing useful direction about what councils should be expected to do) were improved compared to the status quo. However, "stability" (minimising disruption and allowing councils to plan effectively) and "localism" (recognising the broad role of councils valued in communities and empowering them to decide for themselves) would be worse than the status quo. The RIS suggested that other changes proposed by the government, including additional performance monitoring and rate capping, were "more likely" to support the government's objectives. While ministers have continued to say the changes are targeted at a lack of fiscal discipline by councils, the RIS stated "cost pressures on councils are being driven by capital and operating cost escalation, flowing from supply chain upheaval and a tight labour market during the Covid-19 pandemic, and accelerated headline inflation since". "Infrastructure costs have long been a major cause of rate increases, with councils needing to upgrade infrastructure, especially for water and wastewater treatment plants, and invest in more infrastructure to meet growth demands. "Around two-thirds of capital expenditure for councils is applied to core infrastructure, not including libraries and other community facilities, or parks and reserves." Local government Minister Simon Watts, at the first reading speech on Thursday, said, "We looked at the evidence and it showed that whenever the four aspects of community wellbeing are included in the purpose of local government, rates go up as councils are focused on too many things". Local Government Minister Simon Watts says the bill is all about reining in costs. Photo: RNZ / Samuel Rillstone Internal Affairs' analysis showed rate increases were "about two percent higher when the four wellbeings are in the Act", so while it bears out the minister's statement, the effect cannot explain the full weight of rate rises across the country. The data used also did not account for population growth or distinguish between residential or commercial ratepayers. "Usually, where rates have increased faster, this is because costs for councils have risen faster. The current infrastructure deficit for local government is evidence of prolonged underinvestment, where rates (along with other revenue sources) did not increase enough to enable responsible asset management. "For example, despite rates appearing to increase more towards 2007, the Infrastructure Commission has identified the period from 1995 to 2008 as a time when rates were consistently below their post-World War II average as a share of gross domestic product, and this coincided with a deterioration of the stock of transport, water and waste assets." The analysis stated that the minister only allowed officials to examine two options: the status quo and his preferred approach. "The data and evidence used in carrying out this analysis was generally low quality due to limitations on options exploration and consultation. "There was a heavy reliance on previous regulatory impact statements that covered the same or reverse law changes." The inclusion of the wellbeings has been added to or removed from the law four times since the Act came into force in 2003, so there were more than enough previous analyses to draw from. It remains unclear whether rate capping, which the minister wants "before Christmas", would be included in the bill after the select committee reports back in November. However, the analysis repeatedly highlights that efforts to "limit council revenue from rates" are part of the government's intended package of reform, and a section laying out a timeline of changes includes a redacted entry that follows the implementation of the changes described in the bill. The disclosure statement prepared by the department noted that the RIS was limited to assessing the impacts of refocusing the purpose of local government. It said the Regulations Ministry had determined other aspects of the bill did not need to be assessed, "on the grounds that these proposals would have no or only minor economic, social, or environmental impacts". The ministry also asked the minister to provide an analysis on rates capping when reporting back to Cabinet on the overall bill in December. The statement also showed Minister Watts had asked for consultation relating to transparency and accountability with the Free Speech Union lobby group, the Taxpayers Union lobby group, the New Zealand Initiative think tank, Transparency International, and other ratepayer groups and academics. On performance management, the department also sought feedback from a reference group, and on regulatory relief, the department was instructed to consult LGNZ, Local Government Professionals NZ, Federated Farmers, and Business NZ. Officials also shared a clause of the draft bill with the Local Government Funding Agency. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Scoop
16-07-2025
- Business
- Scoop
Booster Foundation Supports Provincial High Schools To Access Online Learning Platform
The Booster Foundation is supporting 40 provincial high schools to access an online learning platform that helps prepare rangatahi for life challenges like financial planning, further education and work. Booster Foundation to sponsor 40 provincial high schools to access online learning platform MyMahi to grow students' financial capability and independence MyMahi helps prepare young people for life challenges such as financial planning, education and work Booster Foundation will cover most of cost to 40 schools to allow more students to access MyMahi The Booster Foundation is supporting 40 provincial high schools to access an online learning platform that helps prepare rangatahi for life challenges like financial planning, further education and work. The Booster Foundation funds initiatives that support build the financial capability of New Zealanders so they can achieve better financial outcomes and has partnered with My Mahi to widen its availability to young people. MyMahi provides learning modules and resources to equip young people with crucial skills and knowledge as they step toward adulthood. 120 New Zealand schools are already connected to MyMahi and it's expected that this year up to 100 thousand students will use its resources. Booster Foundation Chief Executive Anika Speedy says sponsoring 40 high schools in provincial parts of the country to access MyMahi will benefit students who lack access to facilities like banks and other resources available in cities. 'The Booster Foundation is covering almost all the cost of a school signing up with MyMahi, so its students can utilise these resources. That's $1450 for the first year, with the school only needing to come up with $100,' says Anika Speedy. 'We know a person's financial resilience depends on employment, effective money management and saving. MyMahi has some outstanding resources to guide young people as they navigate challenges like these. 'This includes its support to help young people set up banks accounts and KiwiSaver to get them on to a life-time habit of saving. 'A great example is MyMahi's digital school ID. Students will be able to use it to verify their identity via the Department of Internal Affairs which means it can be accepted by banks, KiwiSaver providers, tertiary institutions, and government organisations, so young people can get on their path to financial independence,' says Anika Speedy. MyMahi director Jeff King says 'We are very excited to be able to help more young people in provincial schools gain access to MyMahi through Booster's generous sponsorship. Teenagers love it, and although many use it at school, there are also a huge number who access it in their own time which says a lot about how useful it is.'
