Local Government Funding Under Microscope

Valuable questions regarding the long-term future of local government revenue and cost pressures are examined in the Productivity Commission’s ‘Local government funding and financing’ issues paper released today, says the Wellington Chamber of Commerce.

"Businesses are a major funder of local government infrastructure and services, so the Chamber is a consistent advocate for rates restraint and accountability for expenditure," says Chief Executive John Milford.

"The Commission highlights councils nationwide spend of 16 per cent of their operating budget on their own overheads and support services, the second highest category after roading.

"It also notes the rapid growth in spending on non-core responsibilities covering culture, recreation and sport, community and economic development, which have risen by over one-third in just the past 10 years.

"The Commission is examining the drivers behind these figures and I look forward to Wellington businesses contributing to their research.

"The Productivity Commission inquiry will hopefully provide guidance on streamlining duplication and over-lapping areas of responsibility between local and regional councils; as well as highlighting successful examples of inter-regional collaboration such as Wellington Water.

"Councils correctly identify responsibilities shifted on to them by legislation, or ‘cost-shifting’, as a source of rising cost pressures. But additionally, councils should be using technology and innovation to cut costs while applying rigorous analysis to their own asset management and infrastructure investments.

"In fact, today’s paper notes rates revenue has increased faster than CPI or real GDP over the past 21 years.

Due date for submissions on the issues paper is 15 February 2019.

ENDS

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