Saturday, March 09, 2013

Rates required

Every line item in a Council's Long Term Plan (LTP) , rolls up into one of several main buckets.

The political-dynamite bucket is Rates Required, because the media and the commentariat know exactly what that means in economic terms: the Council's Long arm, in Your short pocket, after your stash.

So they will move heaven, earth (and every other plausible line item which requires funding), into Some Other Bucket. Leaving Rates Required as a high but explainable figure.

The trick is to keep the punter's mind on Rates Required, because the machinations in 'Fees and Charges', or 'Contributions', or 'Other Revenue', then slide straight under the radar.

So Councils will not stop charging these ridiculous figures per section or lot, because they have ineptocrats to house and feed, plans to write for other ineptocrats to read, and all safely out of the sight of real public scrutiny.

It's a bit like the Bankstaz. Run into a bit of an issue, create an off-balance-sheet vehicle of some sort, shift the problem deals into it, and continue to pass audits and stress tests.

Shell game, really, but there you have it.

Those Fees, Charges, Contributions, Levies etc are all input costs to ratepayer purchases - just at several removes. In manufacturing lingo, Raw Materials, not Finished Goods.

But given that these inputs wind up on section and lot pricing (and then - the bywash effect - feed straight back into Existing Section pricing - a nice little CG for the householder who can then borrow against it or cash it in and light out for other parts), it is still the Council's long arm, in your short pocket.

Councils are, quite simply, economically clueless in this area. And they have completely foobarred the housing and residential land markets....


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