I am quoting this from elsewhere...because it is interesting. Well, I think it is. QUOTE: Bureaucrats chosen by Laila Harre run Auckland Council. A Labour/Green coalition provides the leadership. Look where that delicious combination gets us. Quote: Local government a “plaque in the arteries of the economy” 20/08/2014 2 Comments Picture My rates have risen 50% in four years at a time when the government has managed to keep inflation within the 1-3% target set by the Reserve Bank. How come? For one thing I have never seen so much waste and poor management as I witnessed during my three years in local government. As an entrepreneur I was gobsmacked to see how easily ratepayers money was poured down the drain by Auckland Council officials, whose level of managerial incompetence would make any decent business owner weep, with notable exceptions of course. But if they are bad it’s because they take their lead from a robber baron who, having stolen from his hapless ratepayers, proceeds to spend, spend, spend and borrow, borrow, borrow as if there were no tomorrow. Inflation is a pernicious destroyer of value, especially savings. It is vital for any economy to keep it low. However, as Bernard Hickey points out, two sectors of the economy, local government and energy companies, are to blame for a much higher inflation rate than we can afford. They need to be reigned in. Local governments and electricity companies are to blame for New Zealands inflation rate being much higher than it should have been for the past 10 years. They have raised their prices between 5 and 8 per cent each year for the past decade, despite being semi-regulated and mostly publicly owned. Although the rates have trended down since 2004, they are still much higher than the Reserve Banks 1 to 3 per cent inflation target. And that persistent inflation has acted like a type of plaque in the arteries of the economy, putting up its blood pressure of inflation, interest rates and the exchange rate. Without that persistent inflation at two and three times the rate in the rest of the economy, New Zealands interest rates and currency would have been significantly lower. Ive always wondered why Reserve Bank Governors Graeme Wheeler and Alan Bollard havent convened a conference of mayors and CEOs of councils, electricity generator-retailers and lines companies to read them the riot act. Indeed! Speaking from personal experience again, my local board spent much of our time time and effort trying to keep useless bureaucrats on track to deliver our projects. Left to their own devices nothing much would have been achieved. In fact one of our biggest challenges was the constant change of staff foisted on us by an organisation in a permanent state of crisis. Just as an aside, the high level bureaucrats who run Auckland Council were recruited by non other than Laila Harre. Tells you heaps doesnt it. These two uncompetitive sectors imposed a massive price on exporters and those competing with imports. The Reserve Banks hard-wired focus on keeping inflation between 1 and 3 per cent meant it had no choice but to react with higher interest rates that helped make the New Zealand dollar 10 to 25 per cent over-valued relative to commodity prices and our current account deficit. Manufacturings share of the economy has suffered a similar fate….(but) these tradeable sectors rolled up their sleeves and whittled down costs. They came up with innovative ways to use technology and have improved their productivity. It need not have been like this. In any area where there is no competition, the regulators should keep the pressure on to improve productivity and ensure the price-setters dont just increase prices to solve any problem. It’s only going to get worse for Auckland ratepayers who must prepare themselves for another blow next year when they will suffer from the impact on their rates of increased property revaluations. Auckland has a predominently Labour/Green Council. Look on ye people of New Zealand and despair if this grouping becomes the next government, especially when theyll need the help of Laila Harre. joholmes/blog/local-government-a-plaque-in-the-arteries-of-the-economy
Posted on: Thu, 21 Aug 2014 04:52:09 +0000
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