Finance Minister Nicola Willis said it was fair to expect councils to do the same belt-tightening as the government. Photo: RNZ/Mark Papalii
The Finance Minister says councils "whining" about having to cut costs need to tighten their belts, as rates increases push up inflation.
Inflation edged up to a 12-month high of 2.7 percent, Stats NZ said on Monday.
Rates were up 12.2 percent, still reflecting last year's increases, eclipsing the rise in power costs of just over 8 percent and rent increases of more than 3 percent.
"When we look at what's driving inflation, the factor that Stats NZ are calling out is the biggest is rates rises and that's a concern for the government," Willis told First Up.
"That's why we are making it very clear to councils that we expect them to get back to basics and to do everything they can to keep rate rises low - because it's certainly hurting ratepayers and it's affecting our inflation levels as a country."
Legislation requiring councils to to prioritise core services in spending, carry out extra financial reporting and transparency and accountability reporting, and disclose all contractor and consultant spending is before Parliament.
Separately, the government is looking into putting a hard limit on council rates increases among other options to control rises. Local Government Minister Simon Watts is expected to bring a paper on possible rates capping to Cabinet in December.
Wellington mayoral candidate Andrew Little, a former Labour leader, said a cap on rates would only reduce accountability and undermine the relationship between councillors and residents.
Local Government New Zealand president and Selwyn District mayor Sam Broughton said rates capping could be "disastrous for communities" and leave councils without the means to fund essential infrastructure.
Willis said it was fair to expect councils to do the same cost reduction as central government.
"I've heard their whining, but I've also seen that many of them have continued to be wasteful in their spending, to not drive value for money, haven't gone through the exercises that central government has in terms of pulling in our belt and reducing costs.
"We've also given them a number of new funding and financing tools which they can use to meet their costs outside of rates and we'd like to see them making more use of them.
"In this argument, I'm on the side of ratepayers, not on the side of the whining councillors."
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