NZ councils float wish-list for funding changes to reduce reliance on rates

Local Government New Zealand, which represents the nation's 78 local authorities, wants greater flexibility in the way its members fund their operations, with property rates too limited to address the changing economic and demographic challenges facing councils.

The local government body today released a manifesto with 10 proposals it says will help authorities create incentives to support economic growth, and wants to set up special economic zones to try out new ideas, president Lawrence Yule told the LGNZ conference in Rotorua.

The wish-list includes proposals to drop mandatory rating exemptions for certain categories of land, examining ways to lift the uptake of rates rebates, allow road user charges, levies and fuel taxes to raise revenue for transport, introduce profit sharing with councils for local investment and on mineral royalties, and allowing tourism levies where appropriate.

"We need to put ourselves and our communities in the best possible position to manage significant issues such as regional economic development, demographic shifts, climate change and rapid technological advancement," Mr Yule said in a statement. "LGNZ anticipates a productive and constructive discussion between local and central government, business and communities, to address the proposals and to implement the solutions the communities need."

In February, the body suggested new taxes and government support in a discussion document preceding today's manifesto as it sought to overcome the gap between spending and revenue, where councils account for about 10.5% of public spending but raise only 8.3% of all public revenue.

LGNZ's 10-point plan says property rates on their own "could never be an efficient and effective means" for addressing the raft of challenges councils face, and that trial zones would let authorities tailor their responses to specific regional needs.

The body recommends dumping statutory exemptions on conservation, health and education land, land used for charitable purposes, transport infrastructure land and Maori land and instead putting it to the community on whether it wants to provide rates relief. It also plans to work with the Department of Internal Affairs to investigate why the take-up for rates rebates for low-income ratepayers is low, and look at how to improve the adoption of those schemes.

LGNZ wants to introduce road user charges to help fund the maintenance and upgrading of transport infrastructure, and better manage congestion.

On funding requirements imposed by central government, the local authorities' body wants councils to be consulted on the cost implications they might face from Crown decisions, and to receive co-funding where policy aims to produce a national benefit.

LGNZ also wants a local share of royalties on mineral extraction to recognise the infrastructure councils have to build to enable mining.

The body also wants to implement targeted taxes and levies where visitor numbers put pressure on infrastructure and services, citing the successful introduction in Stewart Island, and it wants a review of developer contributions to help fund the provision of infrastructure created by a new development.

LGNZ said it will develop a plan to push the manifesto, and will start working on the proposals that don't need agreement with business or central government.

(BusinessDesk)