Hawke's Bay councils are generally already ahead of new recommendations from the New Zealand Chamber of Commerce on the best way to find new revenue streams without hiking rates.

However, two councils disagree with the finding that "bed taxes", through targeted rates, would not work.

A draft research paper from the NZ Chamber of Commerce investigating the role and funding of local government is expected to make seven recommendations to local authorities.

Its top recommendations were to constrain council spending, abolish business differentials in favour of user charges, increased targeted rates, more measures to ensure transparency, as well as selling non-core assets and the removal of exemptions on Crown land.


On the other hand the Chamber's research paper concluded that locally set income tax, locally set GST, a payroll tax, a local poll tax, stamp duty, environmental taxes, and "bed taxes" would not work.

Hawke's Bay Regional Council chief executive James Palmer said while the majority of the latter had not been contemplated, on the issue of bed taxes, it was working with Hawke's Bay Tourism on a targeted differential rate for residential ratepayers who provided commercial accommodation.

On the issue of environmental taxes, Palmer added that while the council had no general power to collect environmental taxes, it could charge on a cost-recovered basis for its services and can collect coastal occupation charges.

"The council has previously expressed its interest in charging royalties for water bottling and has noted the intention by central government to consider something of this nature and so is watching this with interest."

Council spending expected to increase "significantly" over its latest LTP.

"The community and central government have demanded a step change in the level of environmental protection, enhancement and risk management undertaken by regional councils - and the growth in expenditure by regional councils throughout New Zealand reflects that."

Although HBRC continued to maintain the business differential rate, its 2018-2028 LTP increased user-charges (cost recovery) for consents and compliance from 60 per cent and 70 per cent, respectively, to 80 per cent across the board.

On the recommendation to sell non-core assets and reinvestment of proceeds into core assets, Palmer said following a review of its capital structure, the council was considering options for reconfiguring its commercial investment portfolio.

The regional council would welcome any move to remove rating exemptions on Crown land, he said.

Napier City Council corporate services director Adele Henderson said Napier was also considering a "bed tax".

"As Napier is a tourist focused city, the council is considering this as part of its financial strategy to help fund infrastructure relating to tourism."

The council had not considered any environmental taxes and did not consider any other "tax" mentioned in the report as its responsibility.

While the council planned some increased to certain user charges, It would not however, accept the Chambers' recommendation the reduce business differentials.

"We have reviewed the split of costs associated with our activities to ensure that those who benefit from our services are contributing to the cost of that provision. We believe this is still an equitable way of charging rates."

In regards to selling non-core assets, after consultation, the council recommended the sale of leasehold land on a case-by-case basis, as long as an alternative revenue generation activity was identified.

Hastings Mayor Sandra Hazlehurst said the council already provided "significant constraints" on its spending.

Mayor Hazlehurst added that the council's most recent funding review in 2012 reduced business differentials gradually over time and sought to recover costs from user charges where practical.

In terms of the "not recommended" additional taxes, Sandra Hazlehurst says the Hastings District Council had not considered any of those.

"We are aware of central government undertaking a review of the funding mechanisms for local government, and we await that report with interest."

Central Hawke's Bay District Council's recent review of its revenue and financing strategy include in its LTP process put forward mainly a mix of public and private funding models for most of its activities.

Hawke's Bay Chamber of Commerce chief executive Wayne Walford said much of what was contained in the recommendations were things the chamber regularly submitted to the region's local authorities - the abolition of the business differential, was one thing requested annually.

"My key question to councils is - are you open for business? Some are, to a certain extent but others are not, despite what they think internally."