Review Funding Of Local Government Before Any Expansion

Federated Farmers Vice President, Tom Lambie, today urged Government to follow the approach used to review central government taxation and to appoint an independent panel of experts to review the funding of Local Government before allowing local government to expand its activities. Mr Lambie was commenting on the recently released discussion document Reviewing the Local Government Act.

" In its review document, Government has failed to address the fundamental problems of funding of local authority services on the basis of property value. Instead we are being presented with the opportunity for a Local Government wish list, without any regard to the inequitable cost already imposed on one sector of the community," said Mr Lambie.

"Tension between the role local government is attempting to play in the community, and the manner in which local government is funded, is already causing major difficulties. "

" One example is Gisborne District Council. That Council provides services to 45,000 people in a large district, but has fewer than 20,000 ratepayers. The protest march by 3000 people angry at rate rises in December of last year suggests that this Council already cannot raise the revenue it needs on an equitable basis," said Mr Lambie.

"To propose moving Local Government to a more permissive regime, without addressing the fundamental funding problem, is irresponsible and something all ratepayers should seriously question."

"The farming community has a big financial stake in Local Government, as the effect of property value rates is to multiply the cost of Council services many times to individual households.

"When a farming family is stumping up over $700 per year for library services, you can expect they are now severely worried by the prospect of their Council providing new services to be funded on the same basis."

"It appears that government is simply going to rely on consultation as the principle check on free spending councils but it is easy for residents to demand more services when someone else is paying the cost."

"Tax Review 2001 could serve as a model for a thorough review of local taxes. It is no good cooking these proposals up with Local Government officials, without looking at the wider financial implications for communities. An independent panel of experts should examine local Government's funding mechanisms. Only after that would it be appropriate to consider expanding the role of Local Government. "

Ends

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