Halt council spending surge: Feds

"Since local government was given four "well-beings" in 2002, the sector has surged spending by 119%, increased the rates take by 95% and quadrupled its debt," says Katie Milne, Federated Farmers local government spokesperson.

"The four "well-beings" introduced in 2002 have encouraged councils to become involved in activities far removed from their "core business".

"The Listener's Jane Clifton said it best, 'Instead of focusing primarily on roading, rubbish, sports grounds and the like, councils became carried away with the excitement of also being business development agencies, party-throwers and all manner of things in which they had little expertise'.

Federated Farmers is using its submission on the Local Government Act 2002 Amendment Bill, to call for change.

"The four well-beings have made it harder for councils to say 'no' to demands for increased spending. It is far too easy for interest groups to advocate for new and expanded council activities and facilities, when they bear little of the cost," says Milne.

The entire economy is being compromised by run-away government spending, both local and central, she says.

"Given Federated Farmers policy staff have submitted on local and regional plans in 68 out of New Zealand's 78 councils, we know local government spending, rates and debt are all forecast to grow over the coming decade.

"A handful of councils are making tough calls and scaling back. That isn't the case overall because local government spending will increase by 49% rates by 57% and debt by 95%.

"Rates will become a serious affordability issue for all New Zealanders.

"It is why Federated Farmers supports proposed changes to focus the purpose of councils, as well as introducing financial prudence requirements."