Several proposed changes to the Local Government Act could impact adversely on business competitiveness, according to Business NZ Chief Executive Simon Carlaw.

Proposals to introduce the power of general competence, to take the vote away from non-resident ratepayers and to put constraints on councils' ability to contract out services could all increase the cost of local government, despite the fact that rates increases already regularly exceed the rate of inflation, Mr Carlaw says.

"Giving councils the power of general competence (instead of the current situation where their powers are defined) would give councils the power to use ratepayers' money to subsidise council involvement in commercial activities and other non-core business - a waste of ratepayers' money.

"Taking the vote away from non-resident ratepayers would be unfair. Many owners of businesses live outside the area where their business is located. Taking away their right to vote on how their rates are spent is undemocratic.

"The proposal for councils to consult over service delivery decisions on the basis of social and cultural factors is also problematic, if these factors are to have as much weight as financial considerations. It could stop councils being able to contract services out - meaning fewer opportunities for the business sector and an artificially high rates bill."

Mr Carlaw said the existing Local Government Act was cumbersome and in need of modernisation and there were a number of positive aspects to the proposals, but the objective should be to make local government better, not bigger or more expensive, and to deliver value for local taxes.

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