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LG funding and rating inquiry a welcome first step

Local Government funding and rating inquiry a welcome first step

Flabby, inefficient and poorly governed local authorities throughout New Zealand should be exposed if the pending review of local government rating and funding policy to be conducted by the Local Government and Environment Select Committee does its job properly, according to the Property Council of New Zealand. Connal Townsend, National Director of the Property Council said never before have local and regional authorities in New Zealand acquired so much income as they do at present.

“From Cape Reinga to the Bluff local authorities are enjoying cash windfalls like never before. Income derived from general rates, target rates, development contributions, fees for consents, user charges, and revenue from other sources (e.g. dividends and charitable payments) is being sucked out of ratepayer’s pockets and into the treasury coffers of New Zealand’s local authorities.

“Every single New Zealand has a right to be concerned about the amount of money demanded by local authorities, and what the money is being used to fund. Having analysed the balance sheets of dozens of local authorities as part of this year’s round of Long Term Council Community Plan (LTCCP) consultations, the Property Council considers that the policies pursued by local authorities throughout New Zealand are having a significant inflationary pressure and are damaging local and regional economies.

“Thanks to the funding and rating policies of local authorities, land development has never been so expensive. This expense creates a significant price floor which in turn impacts on the rateable value of property. As the rateable value of property increases, local authorities are receiving an inflated cash windfall. It’s a vicious cycle of abuse peddled by punch-drunk local authorities who have simply lost all sense of financial control,” Connal Townsend said.

The Property Council will seek to ensure that the Select Committee properly investigates all issues relating to local government funding and rating issues. This includes the current abuse of development contributions where many local authorities are trying to force new property owners to illegally fund the cost of historic and deferred capital expenditure.


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