Local government funding review short on new ideas

The Funding Review report issued by Local Government New Zealand today offers few new insights on how councils should pay for the infrastructure needs of the communities they represent and exist for, the Employers and Manufacturers Association.

"A much wider range of revenue raising measures and techniques are used by local councils throughout the world than are mentioned in this report," said Peter Atkinson, an executive researcher for the EMA.

"The report's authors appear either unaware of them or have not considered how they might apply in New Zealand," he said.

"None of the measures discussed would seem able to address for example, the large deficit facing the Auckland Council required to pay for needed transport infrastructure.

"EMA has long stated that local government is at its best when it sticks to the core business of providing local roads, managing water supply and waste water, the management of community services and providing libraries and parks.

"In considering council plans we often refer to the 2007 report prepared by David Shand. The present report would have been improved by a close analysis of it as no discernible advances toward best practice have been made.

"Yet some funding challenges would disappear if councils adopted more of the Shand recommendations. Shand recommended rates be set on the basis of capital value, that differentials be abolished, and the removal of the 30 per cent cap on uniform annual general charges (UAGC).

"We disagree with the report's suggesting that local councils should have the ability to levy local income taxes, though there may be some merit in the suggestion that local authorities should have the ability to levy a small royalty on minerals extracted in their region."

ends

© Scoop Media