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Aucklander to chair LGNZ funding group

DAVE BURGESS
Last updated 05:00 05/07/2014

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A review that could lead to the introduction of new targeted local-government taxes is gathering steam with Auckland councillor Penny Webster to chair a working group to figure out how councils can collect more money through alternative charges.

Specialist advisers have been appointed, the most significant being Sapere research group, which provides independent expert testimony, strategic advisory services, data analytics and other advice.

An issues paper is expected to be released before Christmas, with the final report and recommendations due in March next year.

The review was announced in April after Local Government New Zealand (LGNZ) said basing rates solely on property values would be unsustainable within 10 to 15 years as the sole taxation form for many councils.

LGNZ president Lawrence Yule said a strong reliance on property tax by councils in New Zealand was unusual by international standards.

"The common international approach is for local governments to have multiple taxing power, important for both resilience and fairness reasons."

A factor behind the review is changing demographics, such as urban flight, northern flight, and our ageing population, placing pressure on the ratings bases of some councils.

"Many regions are facing the complex challenge of changing populations," he said.

"The required growth will place severe pressure on a pure property tax model. We need something that is complementary, and [to] think outside the square."

Funding tools that may be reviewed for appropriateness in New Zealand include local income taxes, local consumption taxes, congestion charges, visitor charges and payroll taxes.

Many councils already impose targeted rates, such as for on-street car parking and official council rubbish bags.

About the only tax previously ruled out by the LGNZ was a poll tax, based on how many people live at an address, although this week they said everything was on the table until they had clearly identified the issues and worked through possible solutions.

Yule said if infrastructure was required, then it was going to cost, and somebody had to pay.

"What we have to work out is what is the fairest and most efficient way of doing that."

Members of the LGNZ local government funding working group will be announced next week.

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