News

Local Government funding: Not broken but will need help

The New Zealand Productivity Commission has released its draft report on local government funding and financing arrangements. It is the most substantial look at these issues since the 2007 Shand report.

In releasing the draft report, Commission Chair, Murray Sherwin said “The current framework measures up well against the principles of a good funding and financing system for local government. It is clearly separated from the central government’s tax base which is an important feature. It is relatively simple and economically efficient. It also provides a high degree of flexibility for councils to shape how they raise their revenue.”

“Councils can make better use of the tools they already have access to, and there is room to improve organization performance, transparency and decision making that will help to relieve cost pressures.”

Murray Sherwin noted that “While this inquiry was initiated in response to a perception that rates have become less affordable over time, the Commission found no clear evidence of that. Rates, overall, have broadly kept pace with population and income growth over the past 3 decades, but have not become relatively more burdensome.”

Commission Chair, Murray Sherwin said “The current framework measures up well against the principles of a good funding and financing system for local government. It is clearly separated from the central government’s tax base which is an important feature. It is relatively simple and economically efficient. It also provides a high degree of flexibility for councils to shape how they raise their revenue.”

“Councils can make better use of the tools they already have access to, and there is room to improve organization performance, transparency and decision making that will help to relieve cost pressures.”

Murray Sherwin noted that “While this inquiry was initiated in response to a perception that rates have become less affordable over time, the Commission found no clear evidence of that. Rates, overall, have broadly kept pace with population and income growth over the past 3 decades, but have not become relatively more burdensome.”