A rates cap doesn’t remove the cost – Shelley Loader

If council costs rise faster than the cap allows, the difference still has to be found somewhere.

I can understand both concerns. Rates increases matter, particularly for people on low or fixed incomes.

Councils should spend public money carefully and demonstrate value.

But reducing expenditure has consequences too, particularly if the easiest things to cut are those we describe as “soft”.

So I find myself genuinely torn.

Rates are not simply another household bill.

They are one way we collectively contribute to our communities, raising a bigger question about what we still consider our collective responsibility.

Paying collectively is hardly new. In a modern democracy, it is how we help fund infrastructure, services and protections we have decided should exist.

Which makes me wonder what happens if we keep contributing collectively while more becomes an individual responsibility or a user-pays service.

Most of us pay towards things we may never use because there is collective value in them being available to others.

Individual responsibility matters, but it isn’t the opposite of collective responsibility.

Sometimes we contribute towards what others need and sometimes we are the ones who need it.

Removing something from a public budget doesn’t necessarily remove its cost.

It may become a user charge, move elsewhere in government, be absorbed by families or communities or leave people going without.

We may simply have changed who carries it.

And we don’t all have the same alternatives.

Those with greater resources may be able to replace what is no longer collectively provided.

Renters don’t pay residential rates directly, but can still experience reduced services or higher user charges without the same direct saving on a rates bill.

Equal cuts do not necessarily produce equal consequences.

So perhaps we need to ask: affordable for whom?

Community expenditure is a useful example because I keep hearing it described as “soft”.

Infrastructure, contracts and statutory functions cannot simply disappear when budgets tighten, while community grants sit within the smaller discretionary pool.

That can make them easier to cut, but not less valuable.

Nor is what we describe as “core” entirely an accounting decision.

It reflects what we believe local government exists to achieve.

Whanganui District Council’s rates breakdown for a near-average residential property puts “community” at about $110 of a $4212 annual rates bill.

Community organisations combine council funding with grants, fundraising and donated expertise, so a relatively small council saving can mean a much larger loss of community capacity.

Philanthropy, businesses and charitable trusts make enormous contributions, but there is a difference between something a funder chooses to support and something we have collectively decided matters enough that everyone contributes.

When community capacity disappears, the need doesn’t disappear with it.

Housing problems, financial hardship and isolation remain, while the same cost-of-living pressures driving demands for lower public expenditure can increase the number of people needing support.

If we remove $30,000 of preventive expenditure from one budget, the accounts record a $30,000 saving.

But if reduced support increases demand for emergency housing, healthcare, police, welfare or mental health services, that cost may simply appear somewhere else – or be absorbed by families and communities.

The saving is easy to measure. The consequences are harder.

We understand this with physical infrastructure.

Deferring maintenance may save money today, but eventually something breaks.

Preventive social investment is harder to value because success often means something doesn’t happen.

We can count the crisis that occurred much more easily than the crisis that didn’t.

Perhaps community isn’t considered “soft” because it matters less.

Perhaps we are simply better at calculating the cost of allowing our physical infrastructure to fail.

Fiscal restraint asks how we can spend less. Fiscal responsibility also asks what happens if we don’t spend.

Ineffective expenditure should be challenged, but accountability should include the consequences of achieving a saving.

Whanganui has already navigated the boundary between collective funding and user-pays.

When gas costs increased at the Splash Centre, the council passed around 40% of the increase on to users through a 50c entry increase, while funding the remaining 60% through general rates to keep entry affordable.

It raises a bigger question. Who carries the cost and who can afford to participate?

Local government gives communities opportunities to influence local priorities.

A nationally set target range doesn’t remove that voice, but it changes the parameters within which local decisions can be made.

There is a difference between asking what our community needs and whether we are collectively prepared to pay for it, and beginning with a predetermined constraint and asking what we are prepared to lose.

Communities have different needs, priorities and views about who should provide what.

But shifting those boundaries doesn’t remove the responsibility.

Someone still carries what is left behind.

How we draw those boundaries helps determine what kind of community we collectively create.

Which is why I remain torn about rates-capping.

Rates affordability matters enormously, but if we achieve it by shifting costs elsewhere, reducing access or creating greater costs later, those consequences belong in the calculation too.

Perhaps the rates debate gives us an opportunity to think more deeply about what we expect people to provide for themselves and what still matters enough that we provide it for one another.

Because some of the things we pay for collectively are not there because each of us personally needs them.

They are there because we decided they were worth having for each other.