Christchurch city councillor Mike Davidson is throwing his support behind rate increases, despite mayor Lianne Dalziel saying Council is “determined to get to zero rate increase.”

The Christchurch City Council has proposed an average rates rise of 4.65 per cent, but that was before the pandemic caused unprecedented economic destruction across New Zealand.

Davidson says “while it’s easy to talk about a zero percent rates increase, the reality is it would mean a ‘cut and burn budget’ that would most likely hurt the city in the medium and long term.”

His comments follow the city’s economic development agency Christchurch NZ’s outlook, which forecasts, in the worse case scenario, up to 36,500 residents could lose their job from the fallout of the Covid 19 crisis.

The latest ANZ economic outlook report says the economic impact of the lockdown is enormous. “Many households and firms are under considerable financial pressure. Job losses have been immediate and significant.”

It says unemployment could reach 11 percent nationally, the same amount as Davidson’s rate payer funded salary increase (he voted in favour of) in December 2019.

He claims “going to zero could see projects like the stadium delayed and the hot saltwater pools not opened.” “Community grants could be cut, the road resurfacing programme reduced.” He says “for many people who are suffering financial hardship at the moment, it’s not the rates increase that will be the major burden. It is the whole rates demand.”

Responding to Davidson’s comments, Tax Payer Union’s Jordan Williams says “maybe for [Davidson’s] household with a guaranteed income, but that’s not how most of us live.”

“It is laughable to suggest holding rates revenue to the same as last year as ‘cut and burn’. There’s not many people I know in the private sector that have last year’s revenue, let alone have it guaranteed. Mr Davidson’s post shows a severe lack of self-awareness to describe rates as not a major burden on households.”

But Davidson says “instead of a blanket approach of going for zero percent increase, we should be focusing on the people who really need financial help. Maybe a rates relief scheme might be a better option.”

He comments appear at odds with his re-election campaign, where he released a statement with “concern about the level of rate increases” that he describes as “unsustainable.”

In August 2019, Davidson said “we have to get the balance right, the rebuild of our city, business as usual and sustainable rates, and we’re not getting the balance right. It is important that we investigate new revenue streams as we cannot expect the rate payers of Christchurch to continue having the level of rate increases we have been seeing year in year out”

Jordan Williams says “It’s also a bit sneaky to threaten cuts to important infrastructure projects. The Government has specifically said they want to help councils by fully funding ‘shovel ready’ projects – and that is the right thing to do.”

“But the flashing red light in Cr Davidson’s post is his comment that he thinks it is the council’s job to help stimulate the local economy. That is central, not local government’s job. Unlike central government’s taxes on income, spending, and profits, local government rates do not reflect a household’s actual ability to pay. Taking money out of a local economy through rates, only to spend it on handpicked projects to ‘stimulate’ the economy, is a false economy. If Cr Davidson wants to play Minister of Finance, he needs to go to Wellington.”

Last month, Christchurch Mayor Lianne Dalziel said “we are determined to get to zero rate increase.” You think you can do it? Asked Lynch in a radio interview – “yes absolutely.” Ms Dalziel says “the organisation has been working behind the scenes in order to achieve this.”

Hospitality New Zealand Christchurch Branch President Peter Morrison says the city needs decision makers “to get things done as soon as possible.” He told Newstalk ZB Christchurch has been was over-saturated by too many nice to have “more bike lanes” conversations.

Decisions to boost Christchurch’s economy should be made by business people “who’ve had to put their balls on the line with their own money into a business to start with.”

But where could savings be made?

Broadcaster Mike Yardley has questioned the council’s annual payroll which he says costs the ratepayer $193.5m – nearly 40 per cent of the council’s entire operational budget. “Under the Dalziel-led council, since 2013, “full-time equivalent employee growth has been 12 per cent”, with staff numbers jumping from 1936 to a high of 2234 last year.”

Retired developer and Demograpia co-author Hugh Pavletich says that’s part of the problem.

“Throughout the 2013 election, Lianne Dalziel made it clear she was going to deal with the structural problems of the Council, but sadly, she has failed to deliver.”