A new report shows local government makes a substantial and essential productivity contribution to New Zealand’s economic growth.

Commissioned by Local Government New Zealand (LGNZ), economic consultants BERL undertook the challenge of finding hard data to quantify local government’s contribution to the overall economy.

The report found three different types of economic impact:

· $2.2 billion from local public administration,

· $20.1 billion in operational and capital spending, and

· up to $500 million in long-term productivity benefits annually from network infrastructure investment to the wider economy.

The report will be unveiled at LGNZ’s SuperLocal25 conference, which sees elected members from around New Zealand gather at Christchurch’s Te Pae Convention Centre over two days.

LGNZ President Sam Broughton says this is the first time local government’s productivity contribution has been assessed like this.

“BERL found that local government generates more than $500 million every year in pure productivity benefits. This isn’t money that councils spend, it’s the money they generate,” says Sam Broughton.

“This productivity comes from work that only councils can do, specifically the network infrastructure that councils build and maintain. For example, if you build roads, you can develop housing. If you increase public transport, you can reduce congestion, which benefits commercial trucking and allows for greater labour mobility.

“And if you invest in water infrastructure to minimise water losses, you’re allowing that water to be used more productively.”

Sam Broughton says the report stresses that central and local government must work in partnership, with better planning and coordination, to deliver economic growth for New Zealand.

“Local government is responsible for over a third of all government infrastructure investment each year, and councils’ infrastructure investments produce economic returns far higher than central government’s — nearly double the return.

“Councils will spend $77.2 billion on capital expenditure programmes over the next ten years. That’s significantly higher than past councils — because today’s councils are playing catch up on historic underinvestment and investing for tomorrow.

“What’s clear is that local government already plays a key role in the growth of this country, and stronger partnership with central government would strengthen councils’ impact on the economy and the wider community.”

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