The country’s Councils are proposing a whole new set of ways of raising money for infrastructure.

And at the same time the Local Government Minister is hinting that the relentless drive to merge and consolidate local Government may be over.

A paper presented to the Local Government New Zealand conference in Rotorua has proposed that infrastructure could be funded by:

  • User Charges – like road user charges
  • Levies – like petrol taxes
  • A share of mineral royalties
  • Tourist taxes.

Those options present a series of political challenges to the Government which has already dismissed Auckland City’s proposals to fund its urban rail system with petrol taxes and motorway tolls.

And given that New Zealand First has already proposed using a share of mineral royalties to fund regional development that idea would be unlikely to find much favour with the current Government. (Though it could form a useful bargaining card if National and NZ First got to talking about forming a Government together after the next election.)

But the Councils make a persuasive case.

Many of the smaller rural councils face real issues with roading maintenance.

NZ First Deputy Leader, Ron Mark, says one, Tararua Council, is proposing to let some sealed roads revert to shingle because it cannot afford to keep maintaining them.

The conference paper offered the case of Waitomo District Council which needs to tarseal a road in its area.

It quotes the Council’s Chief Executive, Chris Ryan: “The council is under pressure to seal the road that leads to the local section of the national cycleway, as tourists in rental cars are not usually permitted to drive on unsealed roads

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“Local residents will not see a significant benefit from sealing the road, as the majority of users are tourists.

“However, at present, the council would need to fund the cost of sealing the road through rates raised from local residents and businesses.

“The ability to directly charge the road users to recover the cost of sealing the road would mean that those who use the road– tourists – pay the cost.”

And though the report calculates that urban road user charges would lose 12% of the revenue they gathered in administration costs, they still have their advantages.

” In areas where congestion is an issue, road user charging is doubly attractive, as it not only provides funds to maintain and upgrade infrastructure, it also helps manage congestion through managing demand.”

However it says that a petrol tax would only lose 5% of what it gathered in revenue costs.

And it comes out heavily in favour of a tourist tax.

“In Queenstown, for example, a permanent population of around 18,000 people receives about 1.89 million visitors. If this were to occur on a national scale, New Zealand, with a population of 4.5 million, would host over 473 million tourists,” it says.

And the Councils are proposing to lobby the Government to LGNZ proposes “to define the conditions where a targeted tax, such as a visitor levy, a bed tax or a local fuel tax, would be efficient in an economic sense and justifiable from a policy point of view.”

But when Local Government Minister Paula Bennett spoke to the conference she didn’t address any of the ideas expressed in the paper.

Instead she offered the Councillors there something that many may have been very reassured by.

“We need to call time on what has been a relentless focus on how many mayors we have, or for bureaucrats to decide what your local democracy should look like,” she said — a clear reference to the recent failed attempts to amalgamate Wairarapa Councils into a super city.

 But if she doesn’t want Councils themselves to merge she certainly wants them to see where they work together and share facilities through Council owned organisations. (COOs)

“I imagine there are some who think that because the Commission has decided to take large reorganisation off the table for greater Wellington and Northland, and because I have clearly stated I will not legislate for large amalgamation that you can all continue as you have,” she said.

“Well you can’t.” 

She said size didn’t  always matter, “but long term sustainable growth in the best interests of all New Zealanders should.”

“This might mean a CCO on water or transport across a region. 

“It could mean a different business structure or increased responsibilities and accountabilities for Regional Councils. 

“It could even mean in areas that might put a number of CCOs in place for key growth and infrastructure that there is no longer a need for a Regional Council. 

“Some councils may even choose to amalgamate.”

 But she said she would not impose change.

“But let me  be clear, there will be change,” she said.

 

Be brave – own the change and both the Commission and I will do everything we can to assist and support you.

 

But let me be clear – there will be change.