Funding and financing
Over the years, successive government reports have confirmed what councils already know: local government funding and financing needs reform.
The current local government funding and financing system can make it challenging for councils to resource their activities efficiently. This affects both affordability for residents and opportunities for economic development.
Research conducted by LGNZ shows councils face increasing financial pressure, with costs rising faster than consumer inflation. At the same time, new rules and responsibilities introduced by successive governments often come without additional funding, adding to the burden on ratepayers. Climate change and ongoing reforms will further impact council finances.
We are advocating for a ‘toolbox’ approach to funding and financing to provide councils with a range of options to align national goals with local needs. Since every community has different challenges and opportunities, councils need flexibility to find the right solutions. Not every tool will work for every council, so we need to take a locally-led approach to finding the right levers for communities – a toolbox approach.
The Government has committed to new funding tools, including city and regional deals, GST sharing on new housing, and a Regional Infrastructure Fund. We are working to ensure these tools are effective and to explore additional options to help councils fund essential services.
Effective funding and financing are essential across all of LGNZ’s policy and advocacy areas, from water and transport to climate adaptation. We continue to push for solutions that empower councils to build thriving, resilient communities.
Our work to date
The timeline below summarises activity to date.
March 2025
We submitted on the petition to limit local authority rate increases to a maximum of the annual inflation rate.
Read the submission
November 2024
We set out 25 funding and financing tools that could make a difference to councils and alleviate pressure on ratepayers.
Read our paper: Funding and Financing Tools
July 2024
We commissioned NZIER to assess, quantify and develop case studies on unfunded rules and responsibilities imposed by successive governments.
Read our paper: Cost impact of central government reforms
May 2024
We set out what councils and communities need from city and regional deals – based on what we’ve heard from councils.
Read our paper: What communities need from the framework for city/regional deals
March 2024
We commissioned Infometrics to provide analysis on recent cost pressures on the local government sector. This analysis put the local government rates rises proposed across New Zealand for Long Term Plans (2024-2034 ) into context.
Read our paper: Analysing increases in local government costs
February 2024
We commissioned Kalimena Advisory to produce a paper to provide insight into international experience around city and regional deals, and how this might be applied in New Zealand.
Read our paper: City deals – Options and Key Considerations
April 2020
We published our view on the findings and recommendations of the Productivity Commission’s inquiry into Local Government Funding and Financing report.