Constant rate increases irk
THE DAYS of New Zealand having an undue reliance on property taxes to fund local government are coming to an end, claims Local Government New Zealand (LGNZ) chief executive Malcolm Alexander.
The independent Taskforce was established earlier this year to look at improvements to local government consultation, planning and financial reporting practices.
Carter says the Taskforce's report will feed into the Better Local Government reform programme which aims to bring clarity to the role of councils, stronger governance and improved efficiency.
The first step in the programme, the Local Government Act 2002 Amendment Bill, was passed by Parliament recently.
"The Taskforce report provides a good steer towards stronger council decision-making and more effective community engagement. This includes improving the purpose and content of long term plans in order to make them more meaningful to the community," says Carter.
The report was released just as the Statistics Department figures showed spending by local authorities exceeded their income by $91 million in the September 2012 quarter. After adjusting for seasonal effects, this shows an improvement on the deficit of $148 million in the June 2012 quarter.
"Spending by local authorities fell significantly in the September quarter, which reduced councils' deficit from the previous quarter by $57 million," local government statistics manager Peter Gardiner says. "However, rates increased by $52 million in the same period, the largest quarterly rates rise in five years.".
Local authorities spent $184 million less in the September 2012 quarter than in the June quarter, mainly due to reduced spending on goods and services (down $201 million). This was partly offset by a rise in interest payments (up $18 million).
Income for local authorities fell $128 million in the September 2012 quarter. This was mainly due to reduced returns on councils' investments (down $120 million). This reflects the regular decline in dividend earnings in the September quarter compared with the June quarter each year. A further downward contribution in the September 2012 quarter came from a fall (down $51 million) in grants and donations.
These falls were partly offset by a 4.6% rise in rates (up $52 million). Traditionally, income from rates increases in the September quarter each year, because councils reassess rates levels at the start of the new financial year.
Local authority statistics are quarterly accounting-based estimates of the money local authorities in New Zealand earn and spend on their core business. These figures exclude income and expenditure on capital transactions and changes in valuations.
