PM says no to new Council taxes

Stuff reports:

John Key has dismissed a push for councils to be able to broaden the way they raise money, saying major changes are not on the government’s agenda.

Today Local Government New Zealand released a funding review paper, claiming a need to address the gap between spending and revenue.

Pointing to pressures from an ageing population as well as local pressures created by tourism and nationally significant projects, the paper mooted revenue gathering including from local taxes and cost sharing with central government.

“The goal is not to increase the overall tax burden for New Zealand, but rather to determine whether a different mix of funding options for local government might deliver better outcomes for the country,” LGNZ president Lawrence Yule said.

According to LGNZ, councils spent about 10.5 per cent of all public expenditure, but raised only 8.3 per cent of the revenue.

The answer to me is to reduce spending to match revenue.

If I had confidence that different funding mechanisms would be used to reduce the level of rates, then I’d support Councils having the ability to use a broader range of measures such as a local GST. However I’m almost certain that we’d end up with rates remaining just as high as they currently are, and have local taxes piled on top of that.

If any new local taxes were subject to approval by referendum, then that could be a goer.