Media Statement For immediate release Wednesday, 16 July, 2003

Baldock: Time to get real on funding local govt

The current nationwide debate among ratepayers facing huge rates increases simply further demonstrates the need to evaluate how local government is funded, United Future MP Larry Baldock said today.

"With the devolution of more and more responsibility to local government over the last 10 to 15 years and the increasing costs of providing services to local communities, a review of how local government is funded has become absolutely vital," Mr Baldock, United Future's local government spokesman, said.

"The model that has worked in the past is becoming increasingly less viable," he said.

"Much has been said about central and local government partnership, but at the moment that partnership seems a little unequal.

"Government collects tax revenues and it shares very little of it with local government. The rating base system must be supplemented by further income streams if local governments are to survive in the next five to 10 years," Mr Baldock said.

Increasing the redistribution of fuel excise tax to local councils for local roads from the current maximum of 47 percent to 80 percent, and reviewing the "tax on tax" of GST on rates would make a significant contribution to local governments' revenue base, he said.

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