30 November 2012
Local Government Bill passes, but funding must be next
Federated Farmers welcomes the passage of the Local Government Act Amendment Bill, but more must be done to contain and
reduce the rates burden, Federated Farmers local government spokesperson Katie Milne says.
“The passage of the Bill is good news for ratepayers. Since 2002 rates have increased an average of 7 percent per year,”
Ms Milne says.
“This growth is unsustainable and to rein it in councils and communities need better guidance and clarity on local
government spending priorities.
“The Bill does this by changing the purpose of local government away from its activist, open-ended job description
towards something more like what most people think local government should focus on: local infrastructure, local public
services and local regulation.
“However, the Bill really just tinkers at the margin and will only go part of the way to containing and reducing the
rates burden.
“What‘s needed now is funding reform, which so far has been the missing element of the Government’s work.
“It is well known that rates fall heavily and inequitably, with farmers being particularly hard hit. Far too many
farmers pay more than $20,000 per year in general rates to fund activities they barely use or benefit from.
“What is perhaps less well understood is that funding policy also affects councils’ regulatory performance, especially
when central government makes laws for councils to enforce, but does not provide any resources. The incentives are all
wrong.
“We also think limited funding options are a factor in housing affordability, for example when councils impose high
development contributions that push up the costs of sections.
“The burden of funding local government must be spread more equitably and that means moving away from the over-reliance
on a 17th century system of property value rates and finding new and better tools for councils operating in the 21st
century.
“Federated Farmers has always been up for this debate. With growing concern about housing affordability we sense the
time is right to make some progress,” Ms Milne says.
ENDS