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Expanding Local Govt Needs Transparent Funding

11 July 2000 PR72/2000


Federated Farmers is warning that any plans to expand the powers of local government need to be matched by moves to improve the fairness of their rating.

Local Government spokesperson Tom Lambie today told the Local Government New Zealand Conference that giving councils a power of general competence without directly requiring more equitable funding would be disastrous for primary industry.

"Without a fair and equitable matching of those who pay with those who benefit, removing the restrictions on expanding local government's role will be harmful for every rural property owner."

Local government revenue gathering is biased towards property owners paying rates on either land or capital value. Uniform per-property charges are limited to 30% of rate income.

"Councils should only provide those services that ratepayers are willing to pay for on an equitable and transparent basis. Unless there is a clear and equitable link between costs and benefits, community 'wants' can easily outstrip what the whole community is willing to pay. Too often, this mismatch is paid for by rural households."

"Federated Farmers' experience with local government funding policies suggests that any expansion of local government's role must involve a central government prescription for transparency and accountability."

"The Government must match its local government liberalising changes with a careful restriction of revenue gathering powers. A necessary first step is a requirement for itemised rate demands," concluded Mr Lambie.

ENDS For further information: Tom Lambie 026-113-161 Catherine Petrey 04-473-7269 (wk)

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