United Future calls for Royal Commission into local body funding

Peter Dunne

United Future wants a Royal Commission to look at the local rates problem but the Government is to yet to announce what form its inquiry will take.

Today United Future leader Peter Dunne issued a party research paper into local government in New Zealand.

It recommended the creation of a Royal Commission of Inquiry with full powers and with the goal of streamlining local government.

United Future leader Peter Dunne said 12 regional councils and 74 territorial authorities - including 16 city councils - seemed a "remarkably high" level of government for 4 million people.

"We recognise that a Royal Commission would not address the immediate issue of this year's rate rises, but we believe it is time to sort out the real problem, not simply relive the same debate year after year after year," Mr Dunne said.

Last month Local Government Minister Mark Burton announced an independent inquiry after intense concern about increasing rates bills.

At the time ACT's Rodney Hide was gathering support for a bill to cap rates and National was seeking a select committee inquiry into the issue.

The government announcement stymied those proposals but it is yet to announce what form its inquiry will take and what powers it will have.

A spokesman for Mr Burton said terms of reference and details would be decided by the month's end.

The Green Party - which holds the deciding vote on the local government select committee - has kept open the option of having a select committee inquiry and said it does not want the inquiry to take too long.

National wants the inquiry to pay attention to what it says are 67 law changes enacted by the Government that load extra costs onto councils.

It has raised those law changes in the past, and in Parliament on August 3 Associate Local Government Minister Nanaia Mahuta said 26 did not impose any cost and 28 were specifically requested by councils.

Mr Dunne said a commission would clearly define local government's core functions that it must provide, identify functions devolved from central government and ensure adequate funding. It would also look at savings through streamlining and identify other improvements.

The party's report said in 2004 local authorities' annual operating income was $4.63 billion of which 57 per cent came from rates.

It suggests introducing new taxes to reduce the pressure on ratepayers such as a local income tax, local business tax, motor tax, land value tax and tourist-related tax.

- NZPA