Business wish list for local government

Media release
October 5, 2007

Business wish list for local government

Abolishing the business differential rate and the need for greater restraint on council spending are the top-of-mind issues for business as new local bodies are elected.

A new publication by Business NZ, ‘Local Government: The Business Case’ encourages councils to take into account the needs of business as they start their work.

Chief executive Phil O’Reilly says a business perspective is valuable – for although businesses are the minority among ratepayers, they pay the lion’s share of the country’s rates bill – largely due to the business differential.

“The rates demanded of business are often disproportionate to the level of services they receive. In effect, businesses are being used as a cash cow for councils, with small and start-up businesses particularly affected.”

In fairness to all ratepayers, Mr O’Reilly says differentials should be imposed only where they can be justified in terms of extra services provided

“Excessive rates are a real burden for business and can restrict the ability of local businesses to create wealth and prosperity for their communities.”

He says there is also great need for councils to focus on their core activities and spend more responsibly.

“Because local government is so sizeable – with revenue, spending and assets to rival our largest enterprises – the way councils use resources and carry out regulatory activities is of vital importance to the economy as a whole. “

Further recommendations on a wide range of issues are aimed at creating a more efficient local government sector that is less costly for ratepayers in general.

These include improvements to the Resource Management Act and Building Act, more use of public-private partnerships to fund large capital works, greater transparency in rate invoices and financial accounts and no policies that encourage artificial land scarcity and unaffordable housing.

Local Government: The Business Case can be viewed by clicking here

ENDS

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