No role for Government in setting local rates
For immediate release on 6 July 2009

Councils in New Zealand are already highly conscious of the need to be efficient and keep costs to citizens as low as possible.

This is the main finding from an NZEIR report, commissioned by Local Government New Zealand, examining the international literature and experience with local government rates capping.

President Lawrence Yule said the report reinforces that the current long term planning and consultative approach delivers the best results.

“The current processes allow ample opportunity and transparency in council decision-making and ensure any new council initiative has the backing of its community.

“This report shows rates capping is a blunt instrument to keep rates low. It does keep rates low but also results in reduced service levels, an infrastructure maintenance backlog and councils that are prevented from adequately meeting the needs of their communities.

“We only have to look as far as New South Wales to see that ‘rate-pegging’ (as it is called there) has resulted in a significant infrastructure backlog and a mismatch between consumer service expectations and what the councils can afford to deliver.

“The best results for services and infrastructure that support healthy communities and economic growth are delivered through the current long-term planning and consultative approach.

“Councillors are elected with a mandate to make decisions on behalf of and with their communities, including the level of rates. The result is that councils meet the expectations of the communities they serve. Any artificial impositions from Government will undermine these democratic processes and the needs of local communities,” said Mr Yule.

Note: the key findings from Rates Capping: A Study of the International Literature and Experience, June 2009 are attached as an appendix.

ENDS

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