Rates will never be enough – councils need the power to raise money in other ways
You might have recently received voting papers for your local body elections. Going by our historically low participation rates, many of those envelopes will remain unopened.
This is a shame, because New Zealand’s local authorities face major financial challenges that affect nearly everyone. Only by increasing democratic engagement and giving ratepayers more reason to vote will real change happen.
Local Government New Zealand recently estimated an extra NZ$11 billion is needed over the next seven years to meet unexpected cost increases. The credit rating agency S&P Global has downgraded 18 councils and three council-controlled organisations, and given negative outlooks to three more councils.
The auditor-general reported in February that inflation has driven up the costs of construction, insurance and debt servicing. This is putting pressure on operational expenses and capital improvements at the same time as demand for council services is increasing.
Central government supports councils primarily through grants, subsidies, shared revenue (such as from road taxes) and development contributions. But its main response to the financial stress now being felt has been to urge local governments to focus on “core tasks”, not “pet” and “vanity” projects.
To that end, the government has........
© The Conversation
