As ratepayers face massive rate hikes around the country, many councils are calling on the Government to help to fix a "broken" funding model.
Rates are in the spotlight as North Canterbury councils consult on their Long Term Plans, which set priorities and funding options for the region over the next 10 years.
Local Government New Zealand last month called for the Government to return the GST collected on rates to councils in a bid to reduce funding pressures.
Ratepayers around the country are facing hefty rate rises due to the cost of living crisis.
Hurunui ratepayers are facing an average 12.37% rates rise, Waimakariri 8.9%, Christchurch 13.24%, Kaikōura 14.5% and Environment Canterbury 24.2%.
'We need a range of levers'
LGNZ president Sam Broughton said the Government collected $1.04 billion in GST on rates.
‘‘We need a range of levers to address the funding and financing challenges in front of us.
‘‘Alongside returning GST on rates, we’ve also put an accommodation levy, GST sharing on new builds, congestion charging and tourist levies on the table.
‘‘With homeowners facing average rates rises of 15%, it is important the Government gives councils more levers to sustainably fund our cities and towns.
‘‘Returning the GST from rates is an excellent place to start.’’
'Read the report and pick up the recommendations'
During Environment Canterbury’s recent Long Term Plan deliberations, deputy chairperson Craig Pauling called on the Government to heed the advice from last year’s Future for Local Government panel report.
‘‘The local government funding model is broken, and we hope the Government reads the report and picks up some of the recommendations.
‘‘Councils have done a good job at keeping rates down, while government has taken more and more.’’
The report noted councils rates have remained at around 2% of GDP between 1895 and 2015, based on Productivity Commission data.
Taxes from central government ‘‘as a percentage of GDP has risen over time’’ from around 7% in 1895 to around 30%, the report says.
New Zealand has one of the most centralised tax systems in the world, with central Government collecting 93% of taxes, leaving just 7% shared between the councils.
Pauling said allowing councils to retain the GST collected on rates and charging rates on Crown land would help to ease the burden.
Govt considers giving councils a portion of GST
Local Government Minister Simeon Brown said the Government is considering sharing a portion of GST collected on new residential builds with councils, but not the sharing GST on rates.
"It has been a longstanding policy to exempt central Government buildings such as schools and hospitals from paying rates, and this is not something the Government is planning on changing."
The Crown does pays rates on Kāinga Ora housing, administrative buildings occupied by the Crown, buildings for emergency and correctional services (police, the courts, corrections facilities, fire services) and defence properties.
'We want to hear what people want'
Hurunui District Council chief executive Hamish Dobbie said his council was keen to receive feedback on the draft Long Term Plan, especially from those who support it.
‘‘People tell us what they don’t want but we want to hear what they do want.
‘‘Do they want us to be spending more on roading and to carry on meeting the regulatory standards for Three Waters?’’
Consultation on Hurunui’s draft Long Term Plan closes on April 29, with the Kaikōura District Council’s consultation closing on April 30.
The Waimakariri District Council’s consultation closing on Monday, April 15, and Environment Canterbury on Sunday, April 14.
LDR is local body journalism co-funded by RNZ and NZ On Air.
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