Commenting on the Productivity Commission draft local government funding and financing report, Auckland Business Chamber head Michael Barnett noted that the Commission favoured the ‘benefit principle” – i.e., those who benefit from a service should pay for its costs.

The Commission also noted that issues of fairness and equity arise from differential rating, a long-standing concern of the Chamber.

Other notable points in the report included the suggestion that Special Purpose Vehicles (SPVs) are a financing option to help councils nearing their debt levels to invest in development in a way involves debt sitting off a council’s balance sheet.

Value capture and user charging would help growth ‘pay for itself’ was among other positive suggestions for a change in how local government to better handle funding growth infrastructure.

The Chamber will make a detailed response to the Commission.