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Review Of The Local Government Act

Local Government Forum

The Local Government Forum today expressed serious concerns about proposals contained in the Government’s discussion document, Reviewing the Local Government Act.

“Local Government has a major impact on the attractiveness of the business environment in New Zealand. Weaknesses in local government performance are hampering business development and job creation,” Rob McLagan, the chair of the Local Government Forum, said today.

"The business community would therefore welcome a principled and thorough review of the activities, funding and powers of local authorities as a first step in reviewing the Local Government Act."

"The Forum is, however, opposed to many of proposals set out in the government's discussion document," Mr McLagan said.

The Local Government Forum comprises business groups whose members have a close interest in local government.

Mr McLagan said local government needed to be refocused on its critical public good role of funding and/or providing those goods and services that cannot be supplied efficiently in the private sector.

“This has been the thrust of policies of successive governments since 1989. The government's proposals move massively in the opposite direction. According to the discussion document, the purpose of local government is to be widely defined to include social, economic, cultural and environmental activities.

"The discussion document has been prepared by central and local government politicians and officials. The views of business, ratepayers and citizens have not been taken into consideration in the preparation of the document - and yet these groups have a vital stake in local government."

Mr McLagan said the Government was also proposing to provide councils with a broad power of general competence.

“Under this provision Councils would be able to 'undertake any business or activity, do any act, or enter into any transaction' that is not otherwise prohibited.

"The discussion document offers no analysis to support such a radical change in the role and powers of local authorities.

"Council activities affect the lives of all citizens, and for this reason there needs to be effective checks and balances. The discussion document proposals lack such constraints, and could lead to a bloated local government sector, with rates rising substantially over time,” Mr McLagan said.

Mr McLagan noted that as the activities and funding of local government go hand in hand, the separate review of the Rating Powers Act should be merged with the review of the Local Government Act.

"It is our view that Councils should increasingly rely on appropriate user charges to fund their activities.”

The discussion document has been prepared by central and local government politicians and officials. The views of business, ratepayers and citizens have been ignored – and yet these groups have a vital interest in local government.”

"The business sector pays around half the rates levied by many councils. It expects full and genuine consultation on the review, consistent with the prime minister’s promise that the Government would be more open about listening to business concerns,” Mr McLagan said.


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