8/14/2019 Council Rates
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Steve Baron
Cambridge's Eye on Democracy
Council Rates
(494 words)
Let's face it, getting your Council rates bill in the post isn't
as exciting as seeing one of the
many attractive Cambridge woman walking down the main street,
but it certainly does
make your heart jump! US President Franklin D. Roosevelt once
said, Taxes, are the dues
that we pay for the privileges of membership in an organized
society. Cambridge rates
certainly aren't cheap, the average ratepayer pays around fifty
dollars a week as their
contribution to the $32 million the Waipa District Council
collects. Basing a tax on the
gestimated value of a property is iniquitous. For example,
Granny may have owned herhome for a very long time so its not her
fault the value has increased exponentially, but
she still has to pay rates based on the value of the property.
Neither does it seem fair that
a household of five who use far more services than a single
dweller, can end up paying
less. There are other options that could be considered. Poll
taxes (tax per head) or
Community Tax as it was known in the UK under Prime Minister
Margaret Thatcher are
one option. However, they were very unpopular and inefficient to
collect. A Service Tax, or
a local income tax that operates separately from the national
tax system has often been
suggested, although this would create significant costs to
collect. Perhaps a more
equitable and simpler way to fund Council services would be
through central government
taxation which already funds a large amount of Council spending.
This would simply mean
raising national tax levels slightly, and spreading the load
throughout society. If Council
services were to become funded in this way, a specific formula
would need to be designed
to ensure Council funding did not become a deep black hole money
is thrown at.
Regardless of how Councils are funded, another important
consideration is how
Councils allocate budgets. One option becoming ever more popular
throughout the world,
and promoted locally in New Zealand by the Wanganui City
Council, are referendums. This
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allows ratepayers to prioritize Council spending. Referendums in
Wanganui have included
decisions on gang insignia, water softening, recycling options
and the Splash Centre (pool)
extension. They were also given various options on rate
increases. These referendums
have proved very popular with referendum voting actually higher
than the Council elections
themselves. An empirical study by Professor John Matsusaka from
the University ofCalifornia has also shown that those American
States that have the referendum system,
spend up to 19% less than those who do not. That would be music
to the ears of most
ratepayers.
The current rating system is held in the same regard as the old
TV licensing fee,
everyone hates it and its just not fair. Council rates are a
regressive tax because they are
not linked to the income of the individual or household. Neither
do they adhere to the
principle of user pays. Therefore they are inherently unfair and
should be replaced.
Steve Baron is an author, Founder of Better Democracy NZ, and
a
regular contributor to publications throughout New Zealand.
He
resides in Cambridge. [email protected]
www.betterdemocracy.co.nz
mailto:[email protected]:[email protected]
