Opportunities emerging for improved local government funding

Emerging themes in the LGNZ Local Government Funding Review show there are opportunities for the sector to contribute even more positively to economic prosperity.

At today’s LGNZ Quarterly Media Briefing, early findings in the Funding Review were discussed. The Review is looking at the adequacy of rating bases where populations are changing; improving council decision-making funding and financing; the pressure of imposed costs from central government; the challenge of sustaining small and less economically vibrant areas; and affordability of rates.

LGNZ launched the Funding Review in April to review current funding tools and whether innovation in funding approaches could be introduced to deliver better outcomes for New Zealand’s communities.

Local government plays an integral part in the overall wellbeing of New Zealand’s communities whether directly through providing the water that runs through taps or indirectly such as building and maintaining local roads or through regional economic development strategies. These are all largely funded from property rates.

“Funding is a fundamental and critical part of what determines a smoothly run and well-oiled local government sector. This review is not a revenue grab, but instead a practical and realistic examination of the reality in which the sector operates. This is also about identifying opportunities for the sector to contribute even more to the economic prosperity and social vibrancy of the country,” LGNZ President Lawrence Yule says.

“The review involves a critical self-examination of what the sector can do more efficiently, whether by improved decision-making processes, improved incentive structures, better utilising current funding mechanisms or better collaboration with stakeholders. Ensuring the right incentives are in place to deliver the right outcomes and ensuring local government funding is sustainable is an important and critical part of this process.”

The LGNZ Local Government Funding Review working group is now preparing its consultation paper, due for release in December.