Local Government New Zealand (LGNZ) is calling the new and improved funding and financing tools - announced today by the Government to help accelerate housing growth - a solid start.

Speaking to an audience of Mayors and Chief Executives from around the country, Minister of Housing Chris Bishop revealed a toolkit approach to the funding and financing challenges facing councils including the following changes:

· Moving from development contributions to a more flexible tool called development levies, with regulatory oversight so councils can recover the costs from unplanned growth

· More flexibility around targeted rates

· Broadening existing tools to support value capture

· And changes to the Infrastructure Funding and Financing Act, to make it easier to pay for greenfields infrastructure and to use on state highway projects and public transport projects.

LGNZ President Sam Broughton says while rates will always be the primary source of income for councils, LGNZ has been advocating for more tools in the toolbox to reduce pressure on ratepayers.

“Councils play key roles in enabling economic growth, but we rarely get any share of the economic benefit generated by new housing.

“This means that growth is a cost for councils, not a benefit.

“While many details are yet to be worked through, we welcome the Government addressing the structural challenges that prevent councils from recovering the cost of growth.

“To make sure these tools can really be used to their full advantage and unlock the shackles, local and central government must now work through how these changes will be implemented on the ground.

“The Government’s role is to enable these tools. But ultimately, the tools need to be as flexible as possible so councils can pull the levers they require when they need them.

“On top of the changes today, we know the Government is actively thinking about what incentives are needed for communities and councils to support growth. Under the current system, councils don’t have any buoyant taxes like GST sharing on new builds, which means they can’t access any share of economic growth’s benefits.

“Changing this by allowing new funding tools would also increase social licence for rapid housing development, tourism, mining and forestry, which are all important for economic growth.

“There is huge potential to create better alignment between national goals and local incentives and we are looking forward to working with the Government on this,” Sam Broughton said.

© Scoop Media