The impact of the Government’s response to COVID-19 is beginning to be felt around the country with much more still to come as the wage subsidy is yet to run out and still no sign of a business as usual call from the Government.
In the current Long Term Plan pre-consultation Council survey 75% of respondents have said that they expected the Council to operate within the fiscal limits of debt cap and rate increases. We have a Mayor who campaigned that he believed he could keep us within these limits. Other Councillors also indicated that they would keep debt cap.
Decisions made by this Council consistently went the way of spending large amounts of unbudgeted money indicating that we had no intention of living within our means. Both staff and Councillors are now suggesting that we need to lift our debt cap.
In the CEO’s report for the 28/05/20 Council meeting she quotes New Zealand economist Shamubeel Eaqab who seem to be the hero of the current agenda by central Government and Local Government NZ.
“We need to ask how we can come out of this as strongly as possible. Be as bold and aggressive as possible because this is truly the greatest challenge that we faced since the great depression. Invest in the social and physical infrastructure of New Zealand. That will look after our children and grandchildren, that’s the opportunity we have now.”
Of course, the Government can print money do this. Our previous council way over committed itself and future councils for the next ten years (at least) to build the Kempthorne memorial of woe. We have no headroom to be saving the New Zealand economy.
Shamubeel is also the author of the metric as provided by the NRDA (Nelson Regional Development Agency) in a joint Council workshop lead by Mark Rawson.
Every $1million of rates relief provided supports approximately 8.5 jobs in the economy (i.e. the savings created 8.5 jobs through more productive investment of that $1 million)
However every $1million of interest payments for council investments in a capital works supports 155 jobs in the economy (approximately 18x multiplier).
If the idiocy of this comparison is not immediately obvious to you (like apparently those presenting it to us) then let’s compare apples with apples.
Every $1million of interest comes with $20 – $25 million debt which would typically be spread over 30 years worth of repayments. The total cost the $1 million interest payment and 155 jobs would be in the region of $50-$60 million if my math is correct. Even if my math is not correct, it is fairly obvious that if we comparing the total cost of the $1 million in interest with a comparable amount spent on rate rebates – I think the “18x multiplier” is a sorry joke. If we take the 8.5 jobs per million of rate rebate times $50 million of loan costs then we get 425 jobs created. Compare those apples!
However, we shouldn’t let facts get in the way of the current propaganda being foisted on the Councillors to encourage their already eager ambition to spend a fortune of ratepayers money on all the planet saving wet dreams that they can come up with. Meanwhile dam costs continue to spiral ever upward.
Another example of how your Council consults with you because your opinion counts is the issue of Chlorination of your drinking water supply (for those of you lucky enough to be on a supply without permanent Chlorination). We are, or are soon to be, asking if you would like your health “protected” through a permanently chlorinated water supply.
However, just in case you give the wrong answer, on the 21st of May 2020 Council passed a Drinking Water Quality Management Policy. During the time of debate, I asked if by passing this Policy I was also passing compulsory Chlorination. There was some side-stepping of the issue in the staff response. So, I asked again if it was possible to meet these standards without permanent Chlorination. The response was that it maybe possible but that it would be extremely difficult and expensive.
The end result of passing that Policy is that any future consultation will be a moot point as we will consider public feedback along with staff reports and Government recommendations and come to the informed decision that we have no choice and will implement Chlorination whatever the majority result of the public consultation desires.
The fact that we have nullified public feedback before seeking it is one aspect of this process that annoys me. Another aspect is that the staff tell us that the Government is moving to require all public supplies are Chlorinated therefore, why are we wasting staff time and your money going through the motions of consultation etc by trying to pre-empt what is apparently soon to be legislated?
In conclusion, I will be very surprised if the projected debt during this round of the Long Term Plan (LTP) setting does not once again hit $300 million.
Last time there was a projected debt of $300 million the fine folk of Tasman reacted so passionately that the current debt cap of $200 million was self-imposed.
The difference between then and now is that they tell me they had no intention of spending $300 million last time but that the LTP was a wish list of all the projects that everyone thought might be nice to have and had not been refined down to actually achievable.
This time we will be spending all that money as we try and help the Government jump-start the economy, respond to the requirements of rapidly rushed through Government legislation, house the exploding staff numbers, upgrade everything else associated with more staff and rapidly advancing technological requirements, deliver on the save-the-world ideals of some Councillors, and of course continue to pick up all the liability for the runaway dam overruns.