Wellington councillors' 'living wage' decision probably in breach of the Local Government Act.
Wellington Chamber of Commerce CEO John Milford on his concerns about the councillors' decision on NBR Radio and on demand via MyNBR Radio.
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The Wellington Chamber of Commerce is still considering whether to mount a legal challenge to Wellington city councillors’ decision to pay a “living wage” to contractors providing security services to the local body.
Chamber chief executive John Milford tells NBR Radio the organisation is “still working through the governance process” to come to a decision.
If the chamber decides against taking legal action, however, the Taxpayers’ Union has said it “will almost certainly file an application for review.”
Like the Taxpayers’ Union, the chamber’s primary issue with the councillors’ decision is “that this is ratepayers’ money being used incorrectly,” Mr Milford says.
“We believe the council’s responsibility is to ensure the monies they collect from ratepayers – and 47% in Wellington city comes from the business rate – should be used in a practical, cost-effective and commonsense way. And we don’t believe that’s happening in this case.”
Mr Milford says his organisation is also alarmed the councillors ignored the advice of council chief executive Kevin Lavery on the issue.
Before yesterday’s vote, Mr Lavery warned that extending the “living wage” to the security contractors would probably add 19% to the total contract price and that, in the view of the council’s lawyers, it was therefore illegal under the Local Government Act, which prohibits councils from paying more than they need to for services without any corresponding benefit.
“The thing that is really concerning,” says Mr Milford, “is when councillors ignore clear, concise, specific information from their chief executive and their own legal advisers.”
Meanwhile, the Taxpayers’ Union’s “main hesitation” in taking legal action is the possibility the council “may throw good money after bad in paying lawyers to defend the decision,” says executive director Jordan Williams.
“But that might be a necessary evil for councils around the country to be reminded that they are stewards of ratepayers' money.”
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