Call to get on with inquiry on local government funding

December 19, 2017

Farmers and councils are often at loggerheads over planning and rates issues but on the need for alternative funding mechanisms for local government, they’re on the same song sheet.
The Labour and NZ First’s coalition agreement includes a pledge to hold a public inquiry to investigate the drivers of local government costs and its revenue base.
“That can’t happen soon enough,” Federated Farmers President Katie Milne says.
Analysis by the Federation shows a continuing trend of local government rates rapidly outstripping inflation.  From 2007-2017, the consumers’ price index went up 21%. The local government cost index – which councils say is a fairer reflection of their costs pressures – went up 29%.
But both are dwarfed by the 71% hike in local authority rates and charges. (The population in the same decade went up 13%, and while that’s more infrastructure and services to provide, it’s also more people to share the rates burden.)
“For farmers, rates continue to head moon-wards, with static or declining service levels on local roads and little else of value to report,” Katie said.
The briefing to incoming Local Government Minister Nanaia Mahuta earlier this month acknowledges the problem, noting that continuing rates increases may challenge the future affordability of council rates for households.
Rates based on land and improvement values can have little or no bearing on the level of services that councils deliver to farmers, Katie said.  While that can also be true for urban folk “at least they’re getting things like sewerage, water and rubbish collection, which many farms don’t”.
The Federation welcomed the $25 million a year Tourism Infrastructure Fund that the National government earmarked for local authorities – many of them smaller, provincial councils – to help to pay for carparks, toilets and wastewater upgrades to cope with seasonal tourist influxes. 
But with added demands on local government, including billions of dollars to fix water and wastewater infrastructure, new mechanisms, such as GST sharing, need to be looked at.
It’s 10 years since the Shand Report on financing local government costs was tabled, and more or less ignored by subsequent governments.  “We need to debate these issues, and we urge the Government to make its public enquiry a priority,” Katie said.
Meantime, next year regional and district councils will be consulting on their Long-Term Plans.  “Federated Farmers will, as always, be loud in condemnation of any council budgets which show scant evidence of restraint or acknowledgement that the money comes from the pockets of hard-working New Zealanders.”

-  Federated Farmers 2017 Rates Report: