Article: The argument against council rate caps
OPINION: What do we do about 78 councils, rising rates and the need to improve efficiency and focus on the basics?
Some argue the Government should simply pass a law to cap rates and let ‘the market’ sort itself out. But history tells us blunt interventions often generate unintended consequences.
When councils have focused purely on rate minimisation in the past, they’ve generally cut infrastructure maintenance, inspections and deferred capital investment, contributing to a significant proportion of New Zealand’s $200 billion infrastructure deficit.
Government wants to grow the economy and speed up housing development. Yet, ironically, it needs councils to enable housing growth, through investments in roads, water, transport and other essential services.
Capping rates without addressing the funding model simply kneecaps councils’ ability to invest. Without money, projects don’t proceed and assets deteriorate.
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