David Hick

Let me show you a magic trick. And while we’re at it, a little crystal-ball gazing.

The Government has announced (drum roll, please) that local body rates increases will be capped at between 2 and 4 percent.

Theoretically, this means ratepayers can breathe a little easier.

Of course, it doesn’t take a mathematical genius to predict that very few councils will be choosing the 2 percent option.

If the cap is 4 percent, then 4 percent suddenly becomes everyone’s favourite number.

Still, let’s be optimistic.

You celebrate. You feel richer. You imagine a little extra money remaining in your wallet at the end of the year.

Now for the magic trick.

After 12 months, council revenue should be about 4 percent higher.

Right.

Wrong.

The overall intake is still likely to be 10 percent. How?

Sleight of hand.

Yeah. Na.

Fees and charges.

The local government’s equivalent of a magician’s hidden compartment.

LIM reports. Building consents. Resource consents. Dog registrations. Boat ramps. Airport charges. Hall hire. Water charges. Permits. Licences.

The Whakatāne District Council Schedule of Fees and Charges runs to around 60 pages.

Grab a cuppa before reading it.

Possibly a biscuit, too.

The important part is that most of these charges sit outside the proposed rates cap.

You might be thinking, “That doesn’t affect me. I don’t own a boat, run a business or have a pooch.”

Perhaps.

But many of those costs eventually find their way into the prices we all pay. And if not, don’t worry.

The council-owned cemetery is listed near the end of the schedule.

Sooner or later, they’re going to get you.

But the crystal ball suggests this may be only the beginning.

As local government reform continues, more services are likely to be shifted into separate organisations with their own funding models and charging powers.

Water is the obvious example.

Today you receive a rates bill from the council.

Tomorrow you may receive a rates bill, a water bill, a Civil Defence bill, an infrastructure levy and a few other invoices from organisations with impressive logos and reassuring mission statements.

The real concern isn’t that we’ll have more organisations.

It’s that we’ll have more organisations sending bills.

If services are moving away from rates and into user-pays systems, ratepayers should expect to see a corresponding reduction in rates.

That’s the missing part of the conversation.

Because user-pays should come with user-saves.

Otherwise the magic trick isn’t that rates have been capped.

The magic trick is convincing people they’re paying less while more hands are reaching into the same wallet.

And to top it off, the Government (drum roll again), takes its 15 percent on top of all these increase.

And by now, it’s probably worth checking whether your wallet is still there.