LGNZ president Rehette Stoltz (left) says local government needs sustainable ways to pay for infrastructure. Photo / David Unwin
LGNZ president Rehette Stoltz (left) says local government needs sustainable ways to pay for infrastructure. Photo / David Unwin
Councils are being squeezed from all sides, a district leader says, as Local Government New Zealand ramps up pressure on the coalition Government to rethink how local authorities are funded.
Local Government New Zealand (LGNZ) has issued a call to action urging the Government to follow through on its campaignpromise to consider sharing GST revenue from new builds, arguing councils are carrying the cost of growth without seeing the financial benefit.
LGNZ president Rehette Stoltz said: “Local government is not spared from any of the challenges that central government and wider society are facing, including the cost of living and increased costs due to the fuel crisis.
“All of the benefits of growth currently go to central government in the form of GST, new income tax and business taxes.”
The sentiment struck a chord with Hauraki Mayor Toby Adams, who said maintaining adequate funding had become “a real challenge”.
“We hear it from people in the public, we hear it from the media, sometimes [from] our good old mates the Taxpayers’ Union but we hear it from bloody central government as well, always telling us that the rate increases are too much and ‘you guys need to do better’.
Hauraki District Mayor Toby Adams says different sources of funding for local government need to be explored. Photo / Kelly Hodel
“We have got just as much roads, just as much infrastructure as central government’s got to look after and we’re doing it with a fraction of the budget.
“All in all I think we’re doing a blimmin’ good job.”
Adams said a GST giveback scheme could have a major impact for Hauraki District Council, which pays about $2 million in GST each year.
He said even a portion of GST paid on rates being returned to councils would “make a huge difference for our communities on rate increases”.
“If we had the GST back we wouldn’t have had rates increases for the last 10 years so that’s the difference it makes.
“We could have gone up with just inflation without rate increases and not push the problems out, so there’s many different things we could have achieved.“
Adams said he held no animosity towards the coalition Government for not introducing changes in its previous two Budgets, saying it faced similar pressures in “trying to make the dollar stretch as far as they can”.
Still, he believed councils needed new funding mechanisms.
“We’ve got to come up with different ways to fund local government. The only tool we’ve got currently is rates, and [on] those rates we’re paying GST.”
He said another option would be allowing councils to receive royalties, which for Hauraki District Council could include a share of returns from the region’s mining industry.
Both Adams and LGNZ’s comments were put to Housing and Urban Development Minister Chris Bishop.
“Providing incentives to councils for housing growth is a Government commitment and is pillar three of our Going for Housing Growth plan. Work is progressing,” Bishop said in a statement.
