ADVOCATE COLUMN 2nd WEEK MARCH 2012

Local government is once again a hot topic both within Northland and at a national level. While debt in most sectors is declining debt in the Local Government sector continues to rise. Minister of Local Government, Nick Smith has commented that Local Government have increased rates a 6.8 percent of the last ten years compared with the average inflation rate of just 3 percent. I would imagine that this discussion will continue to be of interest to many people over the coming months and that there will be a wide range of perspectives offered on how we can achieve affordable and sustainable governance at a district or regional level. This will come to the fore as Northland’s various councils release their Draft Annual Plans for submission. These plans are intended to be a community’s long-term goals and priorities for a 10 year period. They will contain information about the activities provided by the council including the level of service the community can expect and their contribution towards each of the community outcomes. More importantly it will outline how much this will cost over the same period and detail how it will be paid for. This tension that exists between low rates and a high demand for amenity will be an issue of much discussion. Local councils are in an unenviable position of already high levels of debt and demographic profile that may challenge the traditional framework of infrastructure investment funded by trans-generational debt. At the same time community expectations have increased and external influences have raised the performance level required of many of services they provide. Leaky buildings, earthquake strengthening, water quality waste treatment will all put additional pressure on debt and require that careful balance when allocating spending. A natural consequence of these issues of debt and community expectations is likely to be the rekindling of discussions as to what is the most appropriate structure of governance for Northland. There needs to be informed debate around how many territorial authorities do Northland -or New Zealand for that matter- really need. Also what is an appropriate level of debt for local authorities to carry and how much of this debt should be placed on future ratepayers as opposed to today’s ratepayers. This should be interesting because affordable and sustainable local government may not necessarily be the same as consultative and inclusive local government.