Key Takeaways
- The government is taking a more flexible approach to capping the amount local councils can increase rates
- The rates cap law will be a variable target band, with a maximum increase of four percent starting from 2027
- Local councils will need permission to increase rates beyond the upper end of the government’s set range
- The Local Government is seeking assurance that the policy will not affect their ability to invest in core services like roads, bridges, and public transport
- A fast-track process for exemptions is needed to enable investment in key infrastructure, economic growth, and response to natural disasters
Introduction to the Rates Cap Law
The national voice for local councils has expressed relief that the government is adopting a more flexible approach to capping the amount local councils can increase rates. This decision has been a long time coming, and the government’s announcement on Monday has brought some reassurance to local councils. The rates cap law, which is set to come into effect from 2027, will be a variable target band, allowing local councils to increase rates within a certain range without needing permission. However, if councils want to increase rates beyond the upper end of the government’s set range, they will need to obtain permission. The cap is expected to start with a maximum increase of four percent.
Reaction from Local Government
Local Government interim chief executive Scott Necklen has welcomed the government’s decision to adopt a more flexible rates model. He believes that this approach is somewhat reassuring, as it acknowledges the unique needs and circumstances of different local councils. However, Necklen also wants assurance that the policy will not affect local councils’ ability to invest in core services like roads, bridges, and public transport. He emphasizes the need for a common-sense, fast-track process for exemptions that enables investment in key infrastructure, economic growth, and response to natural disasters. This is crucial for local councils to deliver critical infrastructure and services to their communities in a timely manner.
Priorities for Local Councils
Local Government vice president and Gisborne Mayor Rehette Stoltz has emphasized that keeping rates low is a priority for all local councils. However, she also notes that several councils, including the Gisborne District, are rebuilding infrastructure after multiple severe weather events. Stoltz highlights the community’s expectation that local councils deliver critical infrastructure and services in a timely way. She acknowledges that local councils will need to work with the government to implement the new rates cap law, taking into account the unique needs and circumstances of different communities. This will require careful consideration and collaboration to ensure that local councils can balance the need to keep rates low with the need to invest in essential infrastructure and services.
Implementation and Next Steps
The implementation of the rates cap law will require careful planning and coordination between local councils and the government. Local councils will need to work closely with the government to ensure that the policy is implemented in a way that does not affect their ability to deliver critical infrastructure and services. This will involve identifying areas where exemptions may be needed and developing a fast-track process for obtaining permission to increase rates beyond the upper end of the government’s set range. The Local Government will also need to provide guidance and support to local councils to help them navigate the new rates cap law and ensure that they are able to meet the needs of their communities.
Conclusion
In conclusion, the government’s decision to adopt a more flexible approach to capping the amount local councils can increase rates is a positive step. The rates cap law will provide local councils with the flexibility they need to respond to changing circumstances and invest in essential infrastructure and services. However, it is crucial that the policy is implemented in a way that does not affect local councils’ ability to deliver critical infrastructure and services. The Local Government will need to work closely with the government to ensure that the policy is implemented in a way that meets the needs of local communities and supports the delivery of essential infrastructure and services. By working together, local councils and the government can ensure that the rates cap law is effective in balancing the need to keep rates low with the need to invest in essential infrastructure and services.