Local Government New Zealand (LGNZ) is calling for an end to the stream of unfunded rules and responsibilities imposed by successive governments that cost councils millions every year.   

An LGNZ-commissioned report by NZIER, released today, has found central government doesn’t adequately consider the impact and cost of its decisions on councils and that one-size-fits-all policies often aren’t in the best interests of local communities.   

“Most councils have now set their Long-term Plans by prioritising necessary investment and working with their communities to find savings,” LGNZ Vice President Campbell Barry said. 

“However, governments of all stripes have come up with ideas and reforms in Wellington then told councils to deliver on them, which puts pressure on rates outside of our control.” 

Findings from the NZIER report: 

• Many central government reforms result in increased costs for ratepayers, which central government does not adequately address when making its decisions. 
• Central government underestimates what its reforms cost councils. 
• Councils face high sunk costs when policies change; like freshwater management, which has changed every three years. 
• Ratepayers are now subsidising supposed ‘cost-recovery’ services like liquor licensing because central government sets these fees, and they haven’t increased for a decade. 
• True costs are hidden because councils absorb them by reducing other service delivery. 

NZIER Chief Executive Jason Shoebridge says that the recent pressure on rates is caused in part by governments putting costs onto councils.  

“Central government should better consider the impact its own policies have on councils, including how these impacts vary across councils, else the financial pressure won’t be relieved anytime soon,” Jason Shoebridge said.  

LGNZ is calling for the Government to directly address the impact its decisions have on local government – and for councils to be enabled to set their own fees, fines and cost recovery. 

Campbell Barry says, “this is an issue that has been many governments in the making, but there is an opportunity for the current government to do something about it.  

“By reducing the pressure from central government rules and regulations, alongside fairer ways to pay for growth, the Government can help councils reduce the pressure on rates and households.   

“We welcome action like the Waste Minimisation Act, which made new responsibilities for councils, but also introduced the waste levy to help pay for that. NZIER found this reduced cost on councils.   

“Local government is committed to delivering infrastructure and services that New Zealanders expect and deserve. We are also committed to reducing any unnecessary burden on ratepayers, especially when it doesn’t add value for our communities,” Campbell Barry said. 

Alongside unfunded rules and responsibilities from central government, a report from Infometrics in March found councils have also had huge cost increases for infrastructure like roads and pipes, and ballooning insurance costs. 

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