"A person pays their income tax with resignation but their rates with anger" (anon)
The reliance on property rates for local government funding has been unpopular for many decades. Yet despite several Government inquiries over recent years the basic system of funding local government has remained largely unchanged. The modest recommendations of the 2007 Local Government Rates Inquiry were largely ignored by the Clark government. Later reform proposals by LGNZ were dismissed by the Key government. These responses appear to reflect the view that NZ local governments have significant investment assets and a more flexible rating system, which enable them to meet their obligations and to spread the cost burden fairly.
But is it now time for a “sea change”? There is pressure on local government budgets from the need to fund infrastructure deficits, to provide for the future impact of climate change and for the growth of tourism and to allow for the widening economic gap between the “haves and the have nots”, both individuals and regions. Should NZ have a “one size fits all” funding system or should there more choice for local governments in funding mechanisms, including congestion charges and regional road pricing? And are more transfers, either general or specific, needed from central government?
These issues will be discussed by David Shand, who chaired the 2007 Review and was a member of the Royal Commission on Auckland governance.