The Government has decided to impose a rates capping scheme as part of its broader suite of local government reforms. The NZCTU strongly opposes the proposed rates capping system for the following reasons:
- The policy is being rushed through without proper analysis of the causes and potential solutions to rates inflation.
- It will force councils to cut back on the provision and quality of some services, and incentivise user-fees, with regressive consequences for lower-income groups.
- It will make it harder for councils to close the infrastructure deficit and to prepare their communities for the impacts of a rapidly changing climate.
- It is unlikely to reduce cost-of-living pressures for households over the long term.
- It diminishes local democracy.
- The proposed target band for the rates cap, while preferable to a hard cap, is too restrictive.
This submission sets out the NZCTU’s key concerns with the proposal to cap rates and provides feedback on the proposed rates target model.