14 February 2005

Changing the face of local government

For immediate release on 11 February 2005 A meeting of the metropolitan mayors today reaffirmed the need for the Government to look favourably at providing new funding tools to enable councils to meet the increasing needs of their communities.

“We simply cannot survive on rates alone,” said Waitakere Mayor Bob Harvey, Chair of the metropolitan mayors meeting in Wellington to discuss funding issues facing local government.

“Cities are the engines of this country and there needs to be a fairer and more cost-effective system for funding local government. The Government understands the issues and we are looking forward to working with it to find solutions.”

Mr Harvey said relentless expenditure pressure was coming from a range of sources such as population growth, the devolution of functions to local government from central government, growing community expectations, and new local government functions and services.

“For example, central government passed the Prostitution Reform Bill but it’s local government that has to conduct inspections, deal with complaints, and implement and police the changes,” said Mr Harvey.

Two guest speakers explored how other countries had dealt with funding issues. The first guest speaker was Professor John Peterson, Professor of Public Policy and Finance at George Mason University in Virginia. Professor Peterson’s presentation covered the rationale for local service and infrastructure provision at city level, funding issues facing metro councils in general, the limitation of current funding mechanisms and alternative funding options that are practical, sustainable, adequate, and support local accountability and democracy.

The second guest speaker was Professor Graham Sansom, Associate Professor and Director of the UTS Centre of Local Government, University of Technology, Sydney. Professor Sansom was a member of the team established to examine cost-shifting to local government in Australia.

Mr Harvey said consideration needed to be given to the full range of new funding sources such as increased grants for national public good services and facilities provided at the local level and rating Crown-owned land.

“If local government is going to be able to meet the needs of the community effectively, it is imperative we modernise our funding tools.”

A report from the team working on funding pressures and options will be prepared for the next Central/Local Government Forum, scheduled for June.

The meeting noted that the joint project currently underway between central and local government was the most comprehensive and constructive initiative for many years.

ENDS

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