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LG Minister Nick Smith has told Parliament of his concerns that labour costs in the local government sector and growing too fast.
Between 2005 and 2008, labour costs of both central and local government were rising considerably faster than in the private sector. He said the government has been successful in its efforts to pull back labour costs in the central government sector but recent reports show local government costs are out of step and rising too quickly.
The Minister was asked in Parliament whether there are any differences in the tools available to central government as opposed to local government in managing labour costs.
He said the Cabinet has the capacity to set overall policy on the levels of remuneration and staffing numbers across the state sector.
“These tools had been used to get costs back under control after the excessive growth that occurred prior to 2008. Mayors and councillors currently do not have such tools available to them and this makes it more difficult to manage labour costs and their impact on rate increases,” he said.
“The Government is exploring whether councils need more tools to better manage these costs as part of a broader programme of local government reform, to reduce pressure on rates.”
Recently, the Minister pointed to a rise in council debt, saying the total figure has roughly quadrupled from $1.8 billion to $7 billion over the past decade.
“Debt is the issue of our time. Since 2008 it has been crippling economies internationally.”
Dr Smith said council debt has grown faster than any other sector and is now at levels unprecedented in the 140 year history of local government in New Zealand.
(Note: See the February issue of NZ Local Government magazinefor more information on this topic).
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COMMENTS
Great; can Nick Smith give what the excessive figures of are, or is this just politicising for its own sake? (Note: There is a demaraction between the Democratic elect salaries, CEO and LG staff, so 3 figures required).
1. Nick Smith is using figures which are now 4 years old and therefore irrelevant. 2.Rather than picking on the soft target yet again i.e. the highly skilled LG workforce, what about assessing the widespread, expensive and mostly not required behaviour of LG agencies to use private sector Consultantcies to hide behind when making decisions. These consultancies charge at least 3 times the FTE salary hourly rate, and largely just swan in and interview staff for the answers, document these and pass them on in the form of a report as their own conclusuions. The real waste is here where LG management do not use the skills and expertise that are already paid for i.e. their staff.
Central Govt has to take a lot of responsibility for Council debt - the RMA requirement to continually lift the standard of waste water discharge (Incl storm water) - higher standards for drinking water - waste disposal - OSH (especially on road works) costs more to set up signs and cones than do the job!
Compliance with the LG Act.
The obligation to consider in ter generational equity.
Sure some Council debt is for nice to have but I estimate 80% of it is for essentials.
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