Local Government New Zealand (LGNZ) has today released a set of 25 funding and financing tools that will make a difference to councils and help alleviate pressure on ratepayers.

It comes as households across the country faced rate rises of an average of 15% this year, as local government grapples to pay for the infrastructure and services that communities need.

At an all-of-local government meeting in Wellington today, Mayors, Chairs and CEs of LGNZ’s member councils received a funding and financing toolkit containing a range of funding and financing options to diversify revenue streams, while acknowledging that rates will remain the primary source of income.

LGNZ President Sam Broughton says that councils have long raised concerns that local government funding and financing systems needs change.

“LGNZ is collaborating with the Government to deliver practical tools that empower councils to fund essential infrastructure and services, ensuring national goals, like housing growth and delivering high quality infrastructure, align with local incentives.

“The vast majority of council spending nationwide is on infrastructure - specifically water and transport. And the country’s infrastructure needs are growing.”

A recent IPSOS poll showed that 67% of Kiwis agree that not enough is being done to meet our country’s infrastructure needs, while 70% of Kiwis don’t agree that New Zealand’s infrastructure will cope with future changes in the climate.

“There’s often a mismatch between community expectations and how much people think should be spent - and who should pay for it.

“In the past, councils’ desire to keep rates low has contributed to an underinvestment in infrastructure investment. That can’t continue, so we need to have important local conversations about investment and rates rises - and to find new ways to invest in infrastructure.

“A pragmatic, toolbox approach to funding and financing is important because every council is different and not every funding or financing tool will work for every council.

“It’s clear to us that some of the funding and financing tools in this toolkit – such as GST sharing on new builds and congestion charging - could play key roles in funding the delivery and maintenance of our critical infrastructure and assets.

“These tools aren’t just about money; some are about getting the incentives right to ensure our communities can benefit from growing their local economy, tourism and housing expansion.”

In order for some of these funding and finance tools to be available to councils, Sam says legislative changes are required.

“The Government has been talking about localism and local councils having more autonomy. So the enabling of these tools via legislation is a step in the right direction.

“We’re not asking for all 25 tools at once, we want a range of tools to be considered to make local decision-making more effective. A devolved approach to local government funding and financing is ultimately not only more democratic – it’s more efficient, and empowering local communities is vital for our national economic growth.”

At a Glance: LGNZ Funding & Finance Toolkit for councils

The 25 tools listed in the LGNZ toolkit are divided into three tiers, depending on how they align with the Government’s policy agenda:

Tier 1: Funding and financing tools that the Government is working on

Sharing GST on new builds | Congestion charging | New tolling direction | Value capture | Regional infrastructure fund | Public-private partnerships | Improvements to development contributions | Regional deals | Raising council LGFA debt caps & local water done well | Infrastructure funding & financing act reform

Tier 2: Funding and financing tools that the Government has shown interest in

Accommodation levy | Ratepayer assistance scheme | Local share of crown mineral royalties | End unfunded rules & responsibilities imposed by central government | Removing barriers to council fees, fines & cost recovery

Tier 3: Other tools that councils want

Incentives for non-residential building | General, principled or indexed share of government revenue | GST sharing on rates | Rates & contributions on currently exempt crown land | National rates postponement scheme | Infrastructure equalisation fund | Increase FARS | Remove 30% cap on uniform charge | Regional fuel tax | Civil defence levy

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