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New council rules will be ignored - insider

Published: 8:32PM Tuesday March 20, 2012 Source: ONE News

A major council has told ONE News it will ignore a Government clamp-down on local spending.

Prime Minister John Key outlined reforms to local government yesterday in a bid to reign in increasing rates and spiralling council debt.

The Better Local Government reforms is to come into effect later this year, with aims to rebalance the changes made to the Local Government Act in 2002 that have seen land rates increase by an average of 7% every year and council debt quadruple from $2 billion to $8 billion over the past decade.

The Government's proposed shake-up of council spending has raised concerns over the future of locally-subsidised events like the Volvo Ocean Race stop-over in Auckland or the Wellington International Arts Festival.

Local Government Minister Nick Smith has spelt out the rule for paying out to councils:

"The key legal test for the councils to meet in terms of spending ratepayers' money is that there is a public good," he said.

That means as long as a council can justify that spending is being made in the 'public good', it will get away with it.

But the measure is so broad that one council has revealed to ONE News that the new rules will largely be ignored.

A council insider told reporter Heather du Plessis-Allan, off the record, that it expects to continue funding events and services in exactly the same way it is now.

Unless central government pulls councils up on individual expenditures, nothing will change, the insider said.