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New report backs Goff’s call for additional funding tools

Thursday 4 July 2019

Auckland Mayor Phil Goff says the draft report on local government funding and financing, published by the Productivity Commission this morning, reinforces his calls for new funding mechanisms to be made available to councils.

“Cities across New Zealand are struggling to balance the need for increased infrastructure spending and services with the need to ease the burden on ratepayers,” says Phil Goff.

The commission’s report states that while the rates regime continues to be fit for purpose, a broader revenue base is required for councils to cater to population growth and the challenges created by booming tourism, aging infrastructure and climate change.

Phil Goff says those challenges are most pressing in Auckland where the population is forecast to reach two million by the late 2020s.

“Auckland is ground zero for growth in New Zealand. We’ve grown by over 320,000 people in the last decade and are forecast to receive 55% of New Zealand’s projected growth in the coming 10 years.

“We need to invest to meet that growth, but we can’t hammer ratepayers or go with a begging bowl to government every time we need the funding to do something. New funding mechanisms are badly needed.”

“The commission’s proposal that central government fund local councils according to new building work put in place recognises that and would assist Auckland considerably.”

Potential options proposed by the Productivity Commission include value capture, a bed tax for tourism, greater adoption of user pays models, and special purpose vehicles (SPVs).

Phil Goff says, “I welcome the Productivity Commission’s report and encourage the government to consider all the options.

“I’d also like to see the government consider moving in line with Australia where city infrastructure is partly funded by federal government devolving a percentage of GST revenue to state governments. The New Zealand Government for example could return to councils the GST they charge on city rates.”

For Auckland, that would mean an extra $270 million a year would be available for infrastructure investment and service provision.

“That would make a significant difference,” says Phil Goff.


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