Taxation without representation

You have to wonder about the damage the super city fiasco is doing to National and ACT.

Both parties pride themselves on fiscal responsibility, and accountability. But with the super city they have created a monster that reflects neither principle.

The latest twist is Auckland City’s claim that the Government’s CCOs will incur tens of millions of dollars in taxes that the Auckland ratepayer will have to pick up. Bernard Orsman has the story in this morning’s Herald. Did the Government consider this when it announced its plan to corporatise 75% of Council operations in council-owned companies?

Local Government Minister Rodney Hide and Revenue Minister Peter Dunne put out a face saving statement this morning saying “no decisions have yet been made on taxation issues” for the Auckland Council, yet the third super city bill makes it clear that all of the CCOs except transport will pay tax. They go on to say while some current non-taxable activities will become taxable, tax losses will be offset against taxable income in the future. So we are going to set up a bunch of council-owned companies but we will run them at a loss to avoid paying tax?

At the very least it is another example of Hide’s rushed and shoddy process. See our exchange in question time on this. And more in the general debate.

Add to the possible tax liability a $34 million bill for consultancy fees and executive salaries at the Auckland Transition Agency, and that is only for the last few months.

And the fact that most Aucklanders believe their rates will go up as a result of the super city.  Ditto water rates.

Add to that Auckland Council’s share of the $11.5 billion Price Waterhouse Coopers reckon it will cost to fix to fix the leaky homes crisis.

The poor old Auckland ratepayer is getting well and truly stiffed. By the man who likes to refer to himself as the “Minister of Ratepayers”.  Last year Rodney Hide told an audience “…given how these Councils have been run I would be surprised if there wasn’t some ability to make savings.”  He doesn’t talk about the cost savings of the super city much these days.

But what Aucklanders find really galling about the Government’s super city is that while they are having their pockets picked, the Government is sticking masking tape over our mouths: we’ve been given no choice about the super city, the CCOs will lock us out of 75% of the Council’s operations, and the local boards won’t even have the power to make by-laws.

That is taxation without representation.