3 June 2005

Citizens' Commission On Local Government Funding

Each political party should set out in its manifesto how it intends to respond to the challenge of local government funding, says Porirua City Councillor Robert Shaw.

Councillor Shaw said his Council set up a Citizens Commission to examine and report on local government funding options because of the inequities generated by rates funding based on the capital value of property.

After two years work the Commission has now reported to the Porirua City Council.

“In a high rates city like Porirua people will inevitably question the whole basis of taxation”.

“Porirua's rates burden is unsustainable in the medium term. Either the city will be forced to amalgamate with Wellington City, or, Central Government will allow for greater flexibility in local government funding” Cr Shaw said.

The Porirua Commission on alternatives to rates said the mix of funding sources could include:

* increased user charges * a poll tax * a specifically nationally levied local authority income tax, and * increased government grants for specific purposes.

“Having Parliament to put a cap on rates may be a necessary first step”, Councillor Shaw said.

“In theory councils should be able to discipline their spending and reflect an informed consensus of their communities. However, it is pretty much impossible for Councils to resist the demands for greater services.”

“The recent increase in social spending in Porirua City has been at the expense of infrastructure provision. Now we face substantial challenges particularly in the areas of roads, and environmental protection.”

"As each year rolls by the councillors fail to come to grips with the budget. In Porirua this has meant ongoing rates increases and decreasing flexibility for the Council.”

"I hope the political parties take this issue seriously and provide us with clear alternatives to debate. Whomever we elect to Parliament, they need to take local financial reform government seriously."

ENDS

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