Public support new funding tools to give rates a rest

A poll released by LGNZ today shows the public and councils are united in the need for more tools to pay for local infrastructure and services that reduce the burden on rates.

The Curia poll found 58% of people agree councils need more funding tools to be more effective.

“The current funding system for local government is broken, and everyone can see that given rates rises this year,” LGNZ President Sam Broughton said.

“Councils have been through their budgets, line by line, to prioritise and find savings.

“However, compared to three years ago bridges are 38% more expensive to build, water supply systems are 27% more expensive to build and insurance premiums are up 70%.

“Rates shouldn’t be footing the bill for everything. But with limited levers available, councils have no other options.

“If councils had access to a fairer range of funding tools, the pressure on rates would ease while securing necessary investment in local infrastructure and services. This would also drive economic growth,” Sam Broughton said.

LGNZ has proposed a toolbox of funding and financing tools that can be enabled by the Government.

“We’ve put tools like an accommodation levy, GST sharing on new builds, congestion charging and mineral royalties on the table with the Government,” Sam Broughton said.

Earlier this month, LGNZ welcomed the Government’s decision to progress time-of-use charging, which gives councils the ability to invest in transport while reducing the rates burden.

Support for a tourist charge and GST sharing

A new poll released by LGNZ today found 79% of people think tourists should be contributing toward the local infrastructure and services they use. Only 8% thought ratepayers alone should be footing the bill.

“LGNZ has been advocating for tourism to reinvest into local infrastructure and services. We’re asking the Government to enable councils with an accommodation and tourism levy,” Sam Broughton said.

“For Queenstown, one ratepayer is supporting the infrastructure used by 51 international tourists. In Mackenzie District, just to clean the public toilets predominantly used by tourists adds 1% to this year’s rates bill.

“We want to grow our local economies, but councils and communities need to see a fairer share of the return of growth, not just foot the bill.

A previous poll also found 70% support for sharing GST on new builds.

“Every new development involves costs for existing ratepayers, who provide new roads, water, and sewerage connections. Sharing the GST on all new builds is fair, and anything less will continue to pile unfair cost on existing ratepayers,” Sam Broughton said.

Poll data, commissioned by LGNZ and conducted through Curia:

Curia poll taken from Sunday 05 May to Tuesday 07 May 2024.

If your council did the following, would it make them much more effective, less effective, or make no change to their effectiveness?

Curia poll Thursday 01 August to Monday 05 August 2024

How should the local infrastructure and services that tourists use should be paid for?

• Rates paid by local ratepayers
• Fees and charges paid by tourists, such as an accommodation levy
• A combination of local ratepayer and tourist funding