Hard News by Russell Brown

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Hard News: The Vision Thing

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  • Sacha,

    Oh, and most 'working class' people aren't likely to have the luxury of sitting around discussing such stuff. Let alone deploying their university educations and well-paid contracting to produce such carefully-crafted posts.

    We all have a position in this. 19th century intellectual and moral frameworks are no more useful sometimes than 1990s ones. Though humans have been so for a very long time. It's why the likes of Shakespeare and the Illiad still shine some light on our motivations.

    Ak • Since May 2008 • 19573 posts Report Reply

  • nzlemming, in reply to Sacha,

    Maybe Smith is one of those scared little lads with control issues?

    The key issue is the private sector aspect. Nactional want to sell anything that isn't nailed down, and they believe that being able to pry it up with a crowbar means it wasn't nailed properly in the first place.

    So, first, you get LG out of stuff that your mates can make a profit doing (see Brownlee's comments about "the market will provide" in Chch), then you ditch the stuff that isn't profit making (like housing and infrastructure) on the basis that it's not "core services", and then you take over the debt that councils have incurred, on the basis that you also take over the assets that the debt enabled, then you sell off the assets (theoretically to pay the debt) to the mates from step one, which leaves tiny impoverished councils with nothing but rates for funding, which in turn means those councils will have to come cap in hand for government funding and that's how you control the spending. And somehow, this is supposed to reduce rates.

    Let's face it - change is needed. Most councils are technically insolvent, because of the debt, just like many private companies, and their rateable population is just too small. But what Smith appears to be proposing is a gutting of democracy at the local level. Sure, we'll be able to vote for councillors, but they won't have the resources to actually do anything.

    Waikanae • Since Nov 2006 • 2912 posts Report Reply

  • Sacha, in reply to nzlemming,

    The key issue is the private sector aspect

    As you say, privatising services and assets has to be part of the intent here. Something I haven't seen picked up yet (maybe I've missed it): the insistence on 'must not compete with private sector' sounds an awful lot like Smith's (unsuccessful) plan to hobble ACC so profit-seeking Australian insurance companies could feasibly 'compete' with it. Don't want those Councils outperforming privatised services, do we?

    Key and English seem to share this fear of 'crowding out' - hardly the mark of a confident entrepreneur or leader, you'd think.

    Ak • Since May 2008 • 19573 posts Report Reply

  • Sacha, in reply to nzlemming,

    Let's face it - change is needed. Most councils are technically insolvent, because of the debt, just like many private companies, and their rateable population is just too small.

    Councils have long sought other income streams. Governments have blocked it.

    And like central government, it is a mistake to see Councils as insolvent in a snapshot when they are by law responsible for the needs of future residents as well as current ones. Debt is a way of spreading the cost of current investments over future beneficiaries of it as well.

    But I guess that might 'crowd out' the wealthy from leaving a private inheritance to give their own children a leg up. Sad they don't have more confidence in their offspring.

    Ak • Since May 2008 • 19573 posts Report Reply

  • Rich of Observationz,

    technical insolvency means an organisation has negative net asset value - its debts are greater than its assets.

    This doesn't apply to any council in NZ: Wellington, for instance, has over $6bln in assets and $400mln in debts (2010 annual report). Kaipara, cited as a problem council, has $483mln in assets and $88mln in debt.

    It's like calling someone insolvent when they have a $40k mortgage on a $600k house.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • nzlemming, in reply to Rich of Observationz,

    It's the smaller ones who have the biggest problems.

    Waikanae • Since Nov 2006 • 2912 posts Report Reply

  • Sacha,

    More on reconciling local vs central govt priorities.

    Councils may have to bow to central government's preference as far as some local activities go, with Prime Minister John Key today saying it was not a local body's job to fund projects the Government had decided not to.

    ...

    "In narrowing their purpose clause, it may exclude them from providing those services, or at least challenge their thinking about whether those services should be provided,'' he said.

    "One has to ask the question, if central government isn't providing those services, then really should local government step in and fill the breach? Because there might be a very good reason why central government hasn't done it.''

    Ak • Since May 2008 • 19573 posts Report Reply

  • Rich of Observationz, in reply to nzlemming,

    It's actually mostly the ones in growth areas that have large per capita debt.

    Which is logical, since as an area grows it needs water, sewage, local roads and other capital-intensive services. There will be a stream of rates in the future to pay for these (unless the growth collapses, which is possible if the car-based lifestyle out in subdivision land is destroyed by fuel costs).

    It might be a plan to charge developers more of the upfront cost of services, but this is resisted. By the same Tories who are attacking councils for excess debt, natch.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Sacha, in reply to Rich of Observationz,

    and the policy includes "reviewing" development contributions. Doubt that means upwards somehow.

    Ak • Since May 2008 • 19573 posts Report Reply

  • Kumara Republic, in reply to Sacha,

    John Key:

    “One has to ask the question, if central government isn’t providing those services, then really should local government step in and fill the breach? Because there might be a very good reason why central government hasn’t done it.’’

    Robo-spin if I ever heard it. I wonder if he's referring to Auckland public transit?

    The southernmost capital … • Since Nov 2006 • 5405 posts Report Reply

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