BaconWrappedEnigma

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."

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?

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:

• https://thespinoff.co.nz/the-bulletin/23-09-2025/the-rates-battle-continues-as-council-debt-rises
• https://www.thepress.co.nz/nz-news/360776201/new-council-benchmarking-figures-show-high-debt-levels

And government sources:

• https://www.dia.govt.nz/local-government-performance-metrics
• https://oag.parliament.nz/2012/ltps-2012-22/appendix2.htm

Yeah, it's a bit of a chicken-and-egg problem. If it's nice to ride a bicycle then people ride bicycles. There are selfish and vocal minorities on either side. The lycra-wearing "activist" cyclist riding two abreast; and the staunch car advocate that sees cars as integral to the economy. Our culture has been so car-based for so long it will take a while for the shift to happen. The research is pretty clear.

For nice-to-haves: I'd be happy to see rates rises pegged to wages; so councils can only raise rates in line with wage growth. It's a bit simplistic and reductive but if there aren't meaningful limits then short term political decisions will always win out over long-term financial responsibility.

Creating a nice-to-have budget and then letting constituents vote on how that budget is spent is one way to increase engagement.

Signed - The self-proclaimed best armchair political scientist (Ha!)

It's an interesting distinction you bring up. What is our goal? Do we want to ameliorate the plight of the poor with a fuel tax or RUCs? If that was the goal wouldn't a tax based on the age or price of the vehicle be more effective?

Personally, I was heavy vehicles and gas guzzling vehicle to be charge more because they:

1. put more wear of the roads
2. requie us to import more fossil fuels

It's mildly annoying to have to remember to go buy them and the slightly unnerving when you realise you've gone over. I've never got pulled up on being over and I was unwhittingly driving around for ~3 months that way.

In rural towns I'd say enforcement is passive in that they mainly rely on vehicle sales and other events to trigger re-ups. It is weird how many diesels have broken ODOs compared to petrol cars. 🤔

Weekend trips would contribute to the velocity of money in the economy. It's a bit hidden in your message. Are you saying we should:

• Tax the things that are bad for the economy
• Incentivise the things that are good for the economy

Are you also saying that this change would:

• Disconnect incentives from fuel economy / vehicle efficiency
• Unfairly punish people that made choices under the previous rules
• Remove a tax from "something bad" for our economy (importing petrol)
• Add a tax for "something good" for the economy (travel/shipping/deliveries)

I don't want to put words in your mouth. Am I reading too much into your comment? 🙂

I admire your exceptional commitment to such a controversial bar.