Earlier Chris Hart, of Leith Liquorland, said he wasn’t opposed to cycleways, just poor planning and consultation which undermined businesses. ... Most customers arrived on foot, or in a vehicle, and “I don’t think I’ve ever seen a bike turn up yet”.

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[–] Dave@lemmy.nz 2 points 6 days ago (6 children)

I'm actually curious how rate proportions are done. I'd happily pay more in rates, even just to maintain current services. Does something stop councils altering the way the rates are apportioned? From memory, a lot of rates are not even apportioned by property value. Only one part of the rates are done that way. Does something stop them doing all rates that way? We could keep rates lower for people in lower valued houses while maintaining services by passing this cost onto the higher valued houses.

I know the ones that can afford it are most likely to complain, and definitely more likely to get voted onto the council, but I do think it's a better solution than cutting all major council services except roads and water, as is sometimes proposed.

[–] BaconWrappedEnigma@lemmy.nz 2 points 6 days ago (5 children)

I generally agree on more services is better. I think we're in a bit of trouble though. There doesn't seem to be a universal method of determining rates. AFAICT the councils spend until they need to raise rates, then people complain, and then (sometimes) it's too late:

“Council debt in New Zealand is very high compared with most other subnational government systems around the world,” he says. “This is double, or sometimes triple, the equivalent debt ratio in comparable municipal systems in countries like Finland, Sweden and Switzerland.”

This “high and rising debt burden” was a common factor behind S&P’s decision to downgrade 18 councils in March 2025, plus a few other downgrades over the past 18 months.

Some councils are bumping up against their self-imposed debt limits. This may constrain their ability to invest in infrastructure for the future or to respond to an unanticipated shock.

But self-imposed debt limits can ultimately be amended by councillors. A greater concern is the debt ceilings that arise from Local Government Funding Agency covenants. These are ‘hard’ limits because the lender may cut off financing or seek accelerated repayment from councils that breach them.

Foo isn’t surprised that total debt is set to tick over $40 billion in 2026. He says councils are still borrowing heavily, largely to catch up on the nationwide infrastructure deficit, in an environment where there is political pressure to rein in rates increases.

From: https://newsroom.co.nz/2025/09/17/newsroom-candidates-survey-alarm-as-councils-breach-debt-ceilings/

There are more stories:

And government sources:

[–] Dave@lemmy.nz 1 points 4 days ago (4 children)

The thing that strikes me about it is that there isn't much detail in it. The Spinoff talks about how most candidates claiming they will reduce rates don't actually know how they will do that.

It's mentioned that the reason for the high rates increases is a lack of investment in infrastructure, but nothing more specific.

I agree having such a high dept burden isn't great. Maybe rates increasing so much isn't great either, but maybe rates just need to be much higher than they have been in the past to be sustainable.

This page says local government tries to use debt as a tool to spread the cost over generations.

In deciding, they apply the principle of inter-generational equity: that is, each generation that benefits from an investment, should contribute to the cost of it.

For example, the cost of investment in a wastewater plant that is expected to serve a community for at least 50 years, should be covered by generations spanning those 50 years.

One way of doing this is to borrow and pay it off during the 50-year lifetime of the plant, ensuring that each generation which benefits also contributes.

If debt is used in this way, it makes sense to me. I suspect it is not always used like this, but it seems like a good principle. Without it, you end up with some nice new infrastructure, then decades of councils cutting infrastructure spending to keep rates down followed by a new infrastructure and rates crisis in 50 years. Councils also have access to cheaper lending than we do.

I also question why water should be done by each council instead of a Three Waters style central government approach. That could be one big infrastructure burden removed from councils.

[–] BaconWrappedEnigma@lemmy.nz 2 points 1 day ago (1 children)

I think you are right to question water. The Three Waters thing got needlessly politicised. In the future, we'll see more shared infrastructure and more "shared blueprints" for how to do things as we go forward. I don't agree with the current central government's austerity (they recommended shuttering all regional councils) but I do think that there is a lot of overlap in services. It's pretty amazing how much autonomy the councils have, but one problem with that autonomy is that many of them reinvent the wheel.

Organisations, like LGNZ which you linked to, are already working to streamline things and provide economies of scale to local councils.

The problem with debt is that it is not used like LGNZ described. It is used to shift the burden down to the next batch of elected officials and to our children. This is done without enough public consultation. My view is that there isn't enough long-term accountability, and we need some sort of meaningful cap on rates rises; with exceptions for emergencies of course. Anything above and beyond that budget should have to go for a referendum: e.g. "Let's take on debt to build a sports field!" should be voted on by constituents.

That would require increased engagement in local government which has been in serious decline as documented by numerous inquiries over the last 5 to 10 years.

It's a wicked problem, but it's not insurmountable if regular people activate and push for the right things.

Have you read any Karl Popper?

[–] Dave@lemmy.nz 1 points 22 hours ago (1 children)

The problem with debt is that it is not used like LGNZ described. It is used to shift the burden down to the next batch of elected officials and to our children. This is done without enough public consultation. My view is that there isn’t enough long-term accountability, and we need some sort of meaningful cap on rates rises; with exceptions for emergencies of course.

Isn't debt the alternative to rates rises? You can keep rates lower by borrowing more and passing the cost on to future rate payers. Rates caps doesn't seem like the answer to too much debt. Why not debt ratio limits?

Have you read any Karl Popper?

I haven't. Is there something in particular I should take a look at?

[–] BaconWrappedEnigma@lemmy.nz 2 points 16 hours ago (1 children)

Isn’t debt the alternative to rates rises?

Yes, and: Elected members seem to treat them the same; which is why I keep conflating them in my posts.

Popper wrote "The Open Society and Its Enemies (1945)" while at University of Canterbury:

https://en.wikipedia.org/wiki/The_Open_Society_and_Its_Enemies

This book came to mind when I wrote "... if regular people activate and push for the right things."

[–] Dave@lemmy.nz 1 points 10 hours ago

Cheers, I've put the book on my list to read at some point.

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