Localism

October 3rd, 2013 at 3:00 pm by David Farrar

Brian Fallow writes in NZ Herald:

Local Government New Zealand and the New Zealand Initiative are calling for more public services to be provided by local government and funded by local taxes.

At least they would like to see a debate about whether the split between the responsibilities of central and local government is optimal.

executive director said New Zealand was an outlier among developed countries in having so small a share – 11 per cent – of total government spending undertaken at the local level.

The OECD average for spending by levels of government below central government was 30 per cent, he said, and only Greece and Ireland were more centralised.

We are unusual in having only two tiers of Government – central and local – no provinces or states. Now that I advocate that.

chief executive Malcolm Alexander said a greater devolution of real authority to local government might encourage greater participation by the public, pointing to reports that in the local body elections now under way only 10 per cent of eligible voters in Auckland have voted so far.

The Swiss Ambassador spoke at an event last night on this topic. She mentioned that in Switzerland all powers started with the cantons etc and over time they decided what to hand upwards to the Federal Government, such as currency and military. In NZ all power rests with central Govt and local government is a creation of central government.

While attracted to the idea of local income taxes, Hartwich stressed that he was talking about re-allocating tax between central and local government, not an overall increase.

Absolutely. I have some attraction to the idea of taxes rather than rates to fund local government. Rates increases are only paid by home owners and businesses (directly) and any increases are often hidden by the fact your house’s value may have changed. I suspect it would be harder for a local Council to increase a local tax rate than it is to increase rates.

Hartwich has a paper on localism here.

also spoke last night and made some great points on the resilience of local communities and how locals care far more about local outcomes than officials in Wellington, and spoke about some of the pilots around the Waikato where some local initiatives are achieving great things.

Tags: , , ,

32 Responses to “Localism”

  1. Tom Jackson (2,519 comments) says:

    Answer: NO!

    Exhibit A: Hamilton.

    Vote: Thumb up 8 Thumb down 0 You need to be logged in to vote
  2. anonymouse (708 comments) says:

    I suspect it would be harder for a local Council to increase a local tax rate than it is to increase rates.

    Wanna bet?,

    Just look at the US for an example of all sorts of pet projects being funded by local and state governments with “small” increases in sales tax rates.

    Giving Local Government the ability to raise revenue from either income or sales taxes is simply a bad idea, don’t encourage them…..

    Here’s a list just from California

    http://www.boe.ca.gov/sptaxprog/tax_and_fee_programs.htm

    Alcoholic Beverage Tax
    California Tire Fee
    Childhood Lead Poisoning Prevention Fee
    Cigarette & Tobacco Products Licensing Program
    Cigarette & Tobacco Products Tax
    Cigarette Tax Stamp Program
    Covered Electronic Waste Recycling Fee
    Diesel Fuel Tax
    Emergency Telephone Users Surcharge
    Energy Resources (Electrical) Surcharge
    Fire Prevention Fee
    Hazardous Waste Activity Fee
    Hazardous Waste Disposal Fee
    Hazardous Waste Environmental Fee
    Hazardous Waste Facility Fee
    Hazardous Waste Generator Fee
    Integrated Waste Management Fee (Solid Waste & Wood Waste)
    Jet Fuel Tax
    Marine Invasive Species (Ballast Water) Fee
    Motor Vehicle Fuel Tax
    Natural Gas Surcharge
    Occupational Lead Poisoning Prevention Fee
    Oil Spill Prevention, Response and Administration Fees
    Tax on Insurers
    Underground Storage Tank Maintenance Fee
    Water Rights Fee

    Vote: Thumb up 5 Thumb down 0 You need to be logged in to vote
  3. flipper (3,847 comments) says:

    DPF…’Fallow is all bullshit.
    He was not there..

    I was present at the release of this Hatwich/TNZI paper in Wellington last night.

    Along with several OTB (Outside The Beltway) colleagues, I scored it:

    W. English — 9.5 (speaker system made it hard to hear all that he said.

    O. Harwitch — 9.5 Speaker system was garbage, so hard listening necessary.

    Yule, Hastings Mayor and LGA chair —- four. A dull fellow, reading a speech written for him. Just made a plea for more power for them…and a Royal Commission

    Oram — Zero. One member of the audience loudly commented, while Oram was in the process of criticising the Government over the ChCh rebuild…”BULL SHIT.” Oram was pathetic, and out of his UK depth, TNZI should never again use him.

    The Swiss Ambassador — 9.5 A good visual presentation, explaining the Swiss system.

    Overall TNZI score 9.8 (the weather could have been calmer, and they used Oram as a panel member. ) on OTB’s estimate. Well done. Great contribution to the debaste.

    This was an TNZI event, and the Loc Gov fools simply sought more power by way of a Royal Commission.

    OTB does not think they will get that.

    OTB will be doing, and circulating its analysis in the next few days.

    Suffice to say at this time, all the Loc Gov time servers also present were given a message by W English. But it was NOT what they wanted to hear.

    Oh dear. What a pity.

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  4. tas (596 comments) says:

    Oh god no!

    We have too much local government, not too little. Voters don’t care and consequently those elected are useless. We should have mayors and that’s it. Abolish the rest. If you want a city council, get the local MPs together.

    The reason NZ has less spending at the local level than other countries is because we have a better government structure. I don’t think we should aim to emulate any of the countries we are being compared to. State/municipal/county/district (yes, five levels) governments in the US are a disaster.

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  5. burt (8,030 comments) says:

    Socialism – oversight and monitoring …. NO will never work … Must have command and control – The sheeple need 1 leader to follow !

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  6. gazzmaniac (2,319 comments) says:

    Bill English also spoke last night and made some great points on the resilience of local communities and how locals care far more about local outcomes than officials in Wellington,

    How does that reconcile with your regional parliaments wet dream?

    I quite like the Swiss model of cantons – if the KCDC and Hutt had different tax rates to Wellington, that would encourage people who work in the region to live where it’s most economically beneficial to them. They might decide that they want to live in a low tax district, with less services. Or they might decide that they really like socialist wet dreams, and live in Wellington City. Either way, the choice would be theirs, and it would make councils and the government more transparent and efficient since they would be competing with each other.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. UglyTruth (4,551 comments) says:

    Local government is not real unless there is local judicial process, for the same reason that government without due process is not real. An alternative mechanism to taxation is a local economy in which public services are funded by increasing the money supply within that economy. In order to avoid licencing issues participation in the economy could be limited to those who agree that participation is for lawful purposes only, with disputes resolves by local process consistent with the law of the land.

    Vote: Thumb up 0 Thumb down 3 You need to be logged in to vote
  8. Richard Hurst (797 comments) says:

    We have central govt, regional councils and district/city councils. The problem isn’t too much central not enough local- the real problem is too much govt overall.

    Vote: Thumb up 3 Thumb down 0 You need to be logged in to vote
  9. burt (8,030 comments) says:

    Relax people – when Labour illegally buy win the next election all decisions of central government will be made by the unions. The funding arm of the Labour party are powerful enough to choose a leader – they will now demand they run the policy.

    So.. If you want any changes to how government operate – talk to your union representative (you will have one once unionism is compulsory again) – that is when they are not swanning around the world on the fees they extracted from minimum wage workers.

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  10. Warren Murray (293 comments) says:

    David, I urge you please to get some tuition in how local government funding works. Earlier you wrote some nonsense that rates should not increase by more than the CPI. Now you write that ‘any increases are often hidden by the fact your house’s value may have changed.’ Wow. Im quite sure most ratepayers dont look at changes in their property’s value to compensate them when they experience a rates rise. Most people want to know what additional services are being provided or what has led to the increase in the rate.

    Im glad other commentators are as appalled as I am at the idea of giving more revenue making powers and spending opportunities to local government. There is growing disillusionment with local government, evidenced by the revolving door of 2nd rate characters who continue to put them selves forward as candidates, declining voter participation, opaque rating policies, disregard for ratepayers’ input into policy decision making, etc.

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  11. Cato (1,095 comments) says:

    I am strongly in favour. More borders means more complexity, but it also means more freedom. Decentralisation is a core conservative value. However, it has to be tied in with a reduction in centralised power.

    If you don’t like the local ordinances of the Wellington hipsterocracy, you can move to Taranaki. Or you can try and do something about it locally, which is more likely to be effective than writing Grant Robertson and seeing what he’ll do about it.

    FWIW, don’t we have three tiers of government? Central, regional and territorial?

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  12. lastmanstanding (1,241 comments) says:

    All I want the local council to do is the following;

    1. Mow the berms.
    2. Collect my rubbish/recycling once a week.
    3. Maintain my local library.
    4. Maintain the public parks and local beaches.
    5. Get the F… outta my life.

    I am prepared to pay a reasonable cost for 1 to 4.

    BTW My wife and I have just past the 34th anniversary of moving into to our house.

    During that time our rates have increased 250% more than the CPI over the same period. I repeat 250%. We have paid rates to the following in that time
    1. East Coast bays Borough Council. Did a good job rates rose at a little more than inflation.
    2. From 1989 North Shore City. Rates rose in proportion to the fall in services and increased above the CPI every year.
    3. Auckland City. under Loopy Len and Pathetic Penny rates have gone thru the roof PLUS we now pay a monthly charge to Water Care that in 2 months equals the same amount we paid North Shore City for Six months using the same amount of water.

    And Loopy Len and Pathetic Penny want a $3BILLION choo choo train that no one will use. Sydney has just ripped out its monorail. Could even give it away.

    Vote: Thumb up 3 Thumb down 1 You need to be logged in to vote
  13. Monique Angel (264 comments) says:

    Ha ha ha ha. What a can of worms you don’t want to open in New Zealand. Californian ballot measure Proposition 30 was passed at the November 2012 election.
    It resulted in tax increases for those earning over $250,000 and a statewide sales tax increase.

    It’s just awesome, right?

    http://allthingsd.com/20121204/what-proposition-30-means-for-californias-entrepreneurs/

    Vote: Thumb up 3 Thumb down 0 You need to be logged in to vote
  14. Monique Angel (264 comments) says:

    Yeah cato. I think you’re promoting socialism by stealth. Good luck with that platform.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  15. Pauleastbay (5,035 comments) says:

    yep I want the local plumber who 14 people voted for to be in position to tax me to spend on his favourite things.

    I believe there are about 7500 elected positions in New Zealand which is about 7460 too many

    local initiatives are achieving great things.

    and they will all involve spending other peoples money . Just look at todays herald and see how Len is well on the way to brankrupting Auckland. The art centre in Glen Innes would have been my pick as the “must spend money on ” if I was on the council FFS Does he have any idea how stupid it sounds,? ” art centre in Glen Innes”

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  16. Cato (1,095 comments) says:

    Pretty much – because we all know the Democratic government wouldn’t have put tax rates up if they weren’t forced to by a ballot initiative. On the other hand, how often have California ballots been used as a sword or a shield by the people against additional taxes?

    Grow up.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. Cato (1,095 comments) says:

    In other anti-localism news http://online.wsj.com/article/SB10001424052748704570704576275051374356340.html

    But nah – local sovereignty and the principle of subsiaridity are just a stealth move to promote socialism. It would be way better for free enterprise if Texas just made itself a federal territory and let Barack Obama run the state.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. UglyTruth (4,551 comments) says:

    I think you’re promoting socialism by stealth.

    How is decentralized local authority consistent with socialism?

    Vote: Thumb up 1 Thumb down 1 You need to be logged in to vote
  19. Cato (1,095 comments) says:

    Answer: It’s not. It’s the opposite.

    Vote: Thumb up 1 Thumb down 1 You need to be logged in to vote
  20. Monique Angel (264 comments) says:

    @ UglyTruth.
    Fucking local governments charge me far too much in the way of rates for me to presume that it’s anything else but another racketeering socialist outfit .
    Add another layer of cunts filching off me and the further towards socialism we slide.
    Just saying.

    Vote: Thumb up 4 Thumb down 0 You need to be logged in to vote
  21. wiseowl (829 comments) says:

    Flipper ,your score on Yule would be correct.
    He has put Hastings City in a position of having close to $100m in debt and sees amalgamation as a way to fudge the issue.
    He would love to have taxes to raise revenue for more pet projects.Just what is not wanted.
    National should have been more prescriptive with their LG changes so that core services were better defined.
    Central Government esp Smith ,just can’t help trying to dictate to Local Government.
    It was a good system but has been messed about with too much.

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  22. UglyTruth (4,551 comments) says:

    Monique, local governments don’t have to rely on rates to pay for services. Rates are just taxes by another name IMO.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  23. Black with a Vengeance (1,705 comments) says:

    Voter dissatisfaction revolves around local body politicians more interested in making their mark and creating a legacy project than focusing on core services and building infrastructure capacity for the greater public good….imho.

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  24. wreck1080 (3,809 comments) says:

    No way, the maoris would gain too much power in any political restructuring — especially now that jeffrey palmer wrote into law that the government must adhere to the principles of the treaty of waitangi.

    I guess in theory it could be a good thing (albeit not with the bunch of pansies at tauranga city council), but, impossible here in NZ.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  25. CharlieBrown (925 comments) says:

    Local government is an archaic institution that is no longer needed in a global, internet age. The idea that you get better representation is BS, I don’t identify with people just because I live in the same town as them. I identify with people that share the same interests and beliefs with me, regardless of where they live in NZ.

    Lets abolish all councils and instead just have regional administration where necessary. Having a single government run everything is far more efficient than a bunch of socilist regional twats raising my taxes and increasing bureaucracy. Less government is better government.

    Vote: Thumb up 3 Thumb down 0 You need to be logged in to vote
  26. Alan (1,082 comments) says:

    @LMS “Sydney has just ripped out its monorail. Could even give it away.”

    Yep, it bugged the crap out of me as they did it outside my hotel window at night, however you seem to be making a linkage between a self contained loop round chinatown / darling harbour that served no purposed to anyone, with no connections to the rest of the Sydney trains system and the proposed auckland city loop. A better comparison of course would be to the “Museum / St James / Circular Key / Wynard /Town Hall” CDB loop that exists in the Sydney and gives great throughput to the city.

    Pretty much exactly what’s planned for Auckland, however as it doesn’t suit your purpose I suspect you just ignore it.

    Vote: Thumb up 1 Thumb down 1 You need to be logged in to vote
  27. shoreboy57 (137 comments) says:

    We have only 4.5m people and yet 100 or so territorial authorities, 20+ DHBs etc. More layers than players.

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  28. Inky_the_Red (744 comments) says:

    Central governments in NZ are too scared to devolve any empowerment to local government. Every new government changes the local government act to suit itself. The current government removed local control over Environment Canterbury.

    Health Boards are partly elected (5/9 I think) but with the central government appointments it unlikely they will ever challenge the plans of the Government.

    Neither of the main parties will empower local government so the future is to be a rubber stamp for Wellington

    shoreboy57 there are less than 80 TAs and Regional Councils.

    compare that to a the Republic of Ireland ( a similar sized country)
    http://en.wikipedia.org/wiki/Local_government_in_the_Republic_of_Ireland

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  29. UglyTruth (4,551 comments) says:

    Local government is an archaic institution that is no longer needed in a global, internet age.

    Decision based on need don’t work in the long term.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  30. PhilBest (5,120 comments) says:

    I share the suspicion of many commenters about how local government will be no more fiscally responsible than central.

    However, we must understand that the more local the connection between the taxation and the expenditure, the more input each citizen has. The Swiss system is excellent and extremely “bottom up”, and the Federal Government is absolutely minimalist, handling little more than the classic core duties of a government; defence and foreign relations and customs and immigration and legal structures. The Cantons, and even the “Communes” (about the size of our local body wards) below the Cantons get to handle law and order, health and education.

    The State of California is not a good example, other than to illustrate that people who live there can and do flee to Texas.

    The whole point is mobility of people and businesses. Cantons and Communes – and in the USA, States and Counties – do present a wide variety of types of governance and people and businesses can move to what suits them best. This is one of the major elements in the USA’s high economic productivity. I heartily recommend Daniel Hannan’s book, “The New Road to Serfdom”, which discusses just how good the US system of separation and devolution of powers is. He chides Americans themselves for taking it for granted and not realising how blessed they are. He describes how disadvantaged people in other countries are by comparison.

    One of the consequences in both the USA and Switzerland, is much higher voting turnouts in local elections and engagement in local politics. People feel their vote for a Republican or Democrat Congressman or Senator will have less of an impact on their lives than their vote for the contestants for the office of the local Sheriff, Property Assessor, Dog catcher, Councillors, Auditor, etc.

    The Swiss Ambassador made the excellent point that people at the local level engage much more closely with how well the money they contribute in taxation, is spent.

    “Flipper” in a comment near the top of this thread, claims that Brian Fallow was not at the event Wed night. He WAS, complete with bow tie, AND asked a question at Q and A time. He got into the auditorium early and sat right down the front so might have not been visible to many.

    BTW I love Flipper assessing Oram with a zero; yeah, the guy is a pinko sourpuss and far too ideologically vested in Len Brown and the Super City. Wonder what he is thinking now about the Herald revelations about the exploding debt. Hope this leads to Palino pulling off the Mayoralty.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  31. CharlieBrown (925 comments) says:

    PhilBest
    “However, we must understand that the more local the connection between the taxation and the expenditure, the more input each citizen has.”

    The is utter rubbish. Local government has little accountability to their ratepayers as most of their constituents don’t pay rates. Identity based on where you live is a facade. The best way to establish the connection between taxation and expenditure is to send out every single taxpayer a receipt showing how much of their money went to each government expenditure. I’m sure such a receipt would change alot of NZ’ers voting habbits.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  32. PhilBest (5,120 comments) says:

    Charlie Brown, you are describing the status quo in New Zealand. You are correct about that.

    However, what we are discussing on this thread, is how localism works in Switzerland.

    If your local taxes are larger than your national taxes, and pay for most of your “public” services, you will be a lot more interested in local politics, and you will have more input than if everything is funded from the capital city. Local government is a huge yawn in NZ because it is so unimportant compared to national politics, and the Council bureaucrats run everything anyway.

    I like your idea of a receipt showing where everyone’s money goes. But this means nothing to the many people who pay little or no tax.

    The beauty of transferring a lot of government duties to highly local government, is that not only value for money as an abstract principle can be insisted on, but all sorts of innovations by locality can be tried out without having to wait for a bunch of bureaucrats to OK it. And large bureaucracies are themselves part of the problem in the modern world. Turkeys don’t vote for Christmas, they vote for perennial pre Christmas fattening without Christmas ever coming. Bureaucracies NEVER act in any interest but their own.

    If each small municipality runs its own schools and chooses how to fund them, this eliminates the bureaucratic self interest factor. Same with numerous other functions. A few local community heroes can achieve massive reductions in truancy, vandalism and crime, something that massive and well funded bureaucracies never even start to achieve.

    Existing Council bureaucracies suffer from the “too big” and too inflexible phenomenon – the solution is smaller-still units of local government. Forget bureaucracy; use contractors for stuff, use local community heroes, use clubs and societies, elect small boards of governors who everyone knows and trusts. The Dorkland Super Council is turning into exactly the disaster that people like Owen McShane and myself predicted.

    And people and businesses DO choose where to locate, and pick the level of taxes and provision of services that suits them. National-level policy prevents any sort of choice in the matter.

    The US system of “Municipal Utility Districts” that can be created anew by property developers, out of existing non-populated areas, is a fantastic advantage, guaranteeing inter-jurisdictional competition even more than the Swiss system does.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote

Leave a Reply

You must be logged in to post a comment.