John MacDonald: Rates caps are a placebo policy

You might recall a poll result that came out back in September which proved that 75 percent of us are idiots. It’s these idiots that the Government is pandering to with the council rates cap it announced yesterday. And the 75 percent of people who said in that poll that they support the Government forcing rates caps on councils will be very happy today. Because, from mid-2029, annual increases won’t be allowed to be any higher than 4 percent. Unless a council manages to get a special dispensation. As a ratepayer, a rates cap sounds like a great idea. But it’s not. One description I’ve seen of the Government’s move is that it’s lazy politics. Which it is. Because of the 75 percent of people who support it, as the poll a few months back would suggest. I suspect the only complaint the pro-rates cap people will have is that it isn’t planned to start for another three-and-a-half years. In mid-2029. By which time there could very well be a different government in power and, if Labour (for example) is true to its word, then the whole thing could be history. Labour’s local government spokesperson Tangi Utikere is saying today that they’ll vote against the rates cap law when it goes through Parliament. He says: “We've made it very clear that we won't expect local government to continue to work and take on additional responsibilities without the funding. So we don't support this rates cap.” Nelson mayor Nick Smith has been very careful not to bag his old National Party mates. But he does admit that it’s not going to be easy. Rates caps have been brought-in in Australia and it’s created severe financial difficulties for some councils over there. What’s more, Christchurch city councillor Sam MacDonald is already talking about the council selling assets to make up for the money it won’t be getting because of the limit on rates increases. All this is, is another placebo policy. Something that might make us feel better for a little while. But it won’t last long.See omnystudio.com/listener for privacy information.