I feel compelled to write this article, given that so many Hawke's Bay residents seem to be oblivious to the damaging effects of the proposed dramatic rates increases conceived by the various Hawke's Bay councils. In the least, this article may jolt a few of these sleepwalkers into the land of reality.
This article is in reference to these earlier posts/ articles:
In this opening comment let me be perfectly clear, New Zealand is in a VERY fragile state currently - both in economic and social terms. In fact I haven't seen our country in such a bad state during my 50 + years living here - a perspective shared by many other astute/ aware/ thoughtful people.
New Zealanders have endured considerable hardship during the past 5+ years - much of which was imposed upon New Zealand citizens by the Government of the day. We have lived through an extraordinarily testing time.
And then along came Cyclone Gabrielle, to further test our resilience.
All in all, quite frankly it's pretty hard to imagine New Zealand slipping further into a state of general decline. And I hope to God that we don't.
Just as we start to emerge from the above testing events, along come councils with their obviously well hatched plans to raise rates dramatically. In the case of Hawke's Bay this is being done primarily in the name of needing to rebuild/shape the geography and infrastructure of this region and then enhance the features that protect the low lying land areas from flooding.
Hawke's Bay councils are promoting double-digit rate increases to apply for the next 12 month rate period - over 20 %. You can read the specifics of their proposals in their respective websites and by reading the articles associated with the above links.
I find these proposals to be truly extraordinary (negatively so), for the following reasons:
- They completely disregard the overall generally poor current state of the New Zealand economy.
- They completely disregard the fact that New Zealand (overall/ as a whole) is the second WORST performing economy out of all OECD countries, where productivity is concerned. So affordability of significant rates increases from household incomes (i.e. the reward from being productive) is likely to be highly questionable for many people.
- They completely overlook the fact that Cyclone Gabrielle smashed the Hawke's Bay geography just over 12 months ago, and this region is still grappling with getting back on its feet again in an economic sense.
- They completely overlook the economic hardship that many Hawke's Bay families are experiencing as our country steers through an economic recession...and possibly even stagflation to come.
- The proposals seem to be based on some wild unrealistic prediction of Hawke's Bay becoming a thriving economy as a whole within a very short timeframe. These are very unrealistic expectations to conceive. Yes, pockets of industry in this region are starting to regain momentum...but many are not.
- They completely ignore the availability of council asset investments to otherwise fund forecast council budget shortfall requirements. Asset realisations which would have very little adverse impact on the Balance Sheets of these councils if enacted. Instead, these councils once again turn to ratepayers as their ATM, seemingly thinking that ratepayers are "low hanging fruit" ripe for the picking. Given the ROI that these assets are achieving, it would not be a significant disadvantage for the councils concerned to sell them; plus review their investment strategies/ portfolios in the process so as to start achieving a higher rate of return in respect of their remaining investment assets.
- These councils seem to be unfamiliar with the term "cut one's cloth in order to achieve the jacket size that is affordable at the time". Every human organisation (right down to household and individual level) on earth must necessarily cut its cloth according to what it can afford at the given time. Councils are no exception - or at least should not be any exception - to this fundamental life rule. Honestly, how difficult can it possibly be for these councils to do one or more of these prudent things: a) Cull non-priority pipelined/ programmed projects, and/ or reduce the scale of pipelined/ programmed projects, and/ or stagger pipelined/ programmed projects so that such projects are implemented over a longer overall timeframe, and/ or defer non-priority pipelined/ programmed projects to a future time period.
- They completely overlook the affordability of their % increase in rates by household owners, given the overall high cost of living currently in play in New Zealand.
- In the case of those councils around New Zealand that have moved - or want to move - rates calculations to be based on the Capital value of privately owned properties, it is astounding to see their lack of awareness of (and/ or regard for) the adverse impact that such a move is likely to have on New Zealand's productivity outcomes. The last thing that our country needs right now is any further disincentive for New Zealanders to be ambitious and productive in our lives. Do councils truly not understand that by calculating rates on the Capital value of properties that this will create a disincentive in the minds of many Kiwi land owners to not want to develop their properties (i.e. incur capital improvements) - including introduce productive assets on their land ? This shortsightedness is truly dumbfounding.
This governance behaviour is a bridge to nowhere good as things currently stand. (By the way, the photo in the header of this article shows the now missing Puketapu Bridge in Hawke's Bay, which was washed away during Cyclone Gabrielle).
Where are other Kiwis at on this subject ? Is it time to collectively look at litigation in order to stave off these attempts by government to "rob Peter in order to pay Paul" ?
Master Your Cash Flow Guide, CPA Accountant, Profit Prophet
6 个月Great article Pete! You could cut & paste most of this for us here in Palmerston North. It would also seem it is something of a country wide issue. But rather than councils taking some kind of leadership or fiscally irresponsible position they seem to be taking the teenagers justification that, “everyone else is doing it”?! I find it infuriating and massively irresponsible. From what I can see councils have no mandate to make these kinds of excessive rates increases. Here the auditors reviewing the council long term plans, are questioning the sustainability of the plan but the councillors (with only a few exceptions) seem to be on some other planet.
Learning to be more the Tortise than the Hare!!
6 个月A good and very valid piece. The ignorance and arrogance of HB councils is beyond a joke and part of the reason we left the Bay. There is a complete lack of long-term thinking in governance and it makes so little sense as to why. Top that with vanity projects that only serve a tiny part of the community and are designed to buy goodwill for councils in the hope that ratepayers are too stupid to see through the facade. A prime example of the level of stupid was the Napier Mayor telling people to get their information re cyclone Gabrielle from the NCC website or Facebook....when almost no one had internet nor power... This is the same Mayor who repeatedly told ratepayer that Napier was safe while gang violence was at an all time high and it was a rare occasion that you went out and didn't see gang patches. There are WAY too many councilors per ward as well so that is a waste of money given each gets around $40K base and then more based of their portfolios...there were 5 for the ward I was in when 2 would have been plenty a saving of $120K right away. Definition of insanity- doing the same thing again and again and expecting a different result!!
Helping people to be the best version of themselves, because when you succeed, we all succeed ??
6 个月The fundamental concern is there is no accountability within local governments. Rate payers will always bail them out.
Bringing O-Studio wellness centre to Hawke’s Bay - a passionate regional New Zealander, former MP for Tukituki, connector, communicator, community advocate and business owner.
6 个月You’re so right about councils appearing blind to the burden on ratepayers and businesses - incredibly challenging getting the seriousness of the huge weight of costs being put on ratepayers.
Kudos on a job well done!