Wednesday 24 April 2013

Affordable City

Like Canada, New Zealand doesn't really have political parties at the local level. There are city-by-city loose affiliations that can be viewed as Labour-linked or National-linked, but they're not all that obvious.

While it's nice to avoid party politicking, it does make it harder for voters trying to figure out which candidates they should support for particular policy bundles. To the extent that local politics is mostly about constituency work rather than policy, this can make sense. But local government policy issues are getting to be rather pressing; failures in local politics seem to be driving housing price inflation and are starting to have macroeconomic consequence. 

And so it's great to see the launch of a new local-politics political party: Affordable City. Their policy objectives:
The national Affordable City umbrella has five policies which all local Affordable parties will have in common.
The individual local Affordable parties may also have other policies which are specific to the issues in their region.
If any readers are sufficiently masochistic to wish to stand for local government, they might wish to get in touch with the folks at Affordable City. Getting local government right is rather important. I worry that it will be a tough slog: homeowners vote far more regularly than do renters, and policies that make cities affordable aren't in the short-term interest of current homeowners.


  1. Eric - a bit off topic but I thought you might be able to add some wisdom to the following discussion about NZ economic performance relative to Australia and the impact of free market economics. John Quiggin is a Queensland based economist:-

  2. Looked at AC's policies. They are a bit incoherent. Still good luck to them if they can get political mileage out of it. Like hundreds of local politicians before them they will find these policies unpalatable/impossible/illegal to implement. And if they do manage it then they will create generations of freeriders in the future.

    If you follow these policies to the letter and in their entirety then the only way to fund a major capital project is out of today's surpluses (there aren't that many councils left with spare realisable assets). AC won't raise rates to create a surplus so they will have to close another service (which will probably have to be a community service) to pay for the new item. Simple example: my council wants to replace a failing bridge. Under AC's policies the council would have to close the whole library system for 3-4 years to build up the surpluses needed to fund the bridge.

    That is a legitimate policy decision but any ratepayer who left the district or died during these four years gets a negative benefit from the policy (i.e. crappy bridge and no library). All those who only become ratepayers after the bridge is built don't have to pay for the benefit of the bridge (hardly at all). Given a design life of 100+ years that's a lot of freeriders!

  3. They're pushing in the right direction, but I agree that large capital projects are best handled through debt issue. And I'm not sure that the group's policies are well-enough developed to say that they rule that out either - I expect that they'd wind up saying that Councils should show long term balanced budgets that allow debt financing of large infrastructure projects but that disallow debt for general services.

  4. Some see the winks and nudges, some don't. Agree that Dalziel is obviously Labour-affiliated, being a current MP and all.

  5. Ok, will have to post on that. Thanks for the pointer.

  6. Well AC can tick that one off as job done already.

    Councils have been publishing transparent 10-year budgets showing all sources of funding since 1996. It is also against current law for a council to take less in current revenues than its projected current expenditure (Local Government Act 2002 s100:

    Balanced budget requirement

    (1)A local authority must ensure that each year's projected operating revenues are set at a level sufficient to meet that year's projected operating expenses.)

    The problem with Affordable City and many hundreds of would-be and actual councillors before them is that there is no magic switch that allows you to lower rates by any noticeable amount. So promises to lower rates turn out to be empty. Any king hit on rates requires radical policies such as closing libraries, supplying dodgy drinking water, letting roads fall into disrepair.

  7. I suspect that the good folks in Dunedin might wish they could turn back the clock a couple years to avoid one very expensive stadium. I hope that we don't encumber ourselves with one here in Christchurch. I agree with you on the day to day stuff - I've no complaints about the rates I'm charged - it's not a bad fee for the service provided, or at least pre-quake that was true. It's the nutty investments in convention centres and stadiums that wind up blowing things out.

  8. I could not agree more. When it comes to convention centres, stadia, motorsport races, sock factories and the rest it beats me why local body councillors would think they have access to secret knowledge not shared by the rest of the world. If a proposal was genuinely likely to make money nobody would knock on council doors for funding, they would keep it all for themselves.

    I am not a fan of LGA 2002 Amendment Act 2012 mainly on the grounds that it could not achieve the results Nick Smith claimed for it. There just aren't that many examples of nutcase investments - maybe a small handful in over 70 councils - that would have been prohibited by it. But I am pretty sure it could have been used to stop the Dunedin Stadium proposal or at least the DCC/ORC funding for it.

  9. No worries. I'm keen to hear your perspective.