Councils target schools, hospitals over rates

  • 21/07/2015
Local Government Minister Paula Bennett
Local Government Minister Paula Bennett

New Zealand councils want to see schools and hospitals paying their fair share of rates - but they insist it's not a "tax grab".

Local Government New Zealand released its final funding review document today - the culmination of a year-long review into how to address a gap between how much local authorities earn and spend.

One of the key proposals is removing rating exemptions which mean organisations on Crown land avoid paying rates.

"We have private schools and private hospitals all paying rates. We have public schools and public hospitals not paying rates," LGNZ president Lawrence Yule told Radio New Zealand.

"Yet all the infrastructure in those communities has to be supported and funded from the non-Crown side of that. And we think that needs to be addressed."

Mr Yule said it wasn't a "tax grab" and there was a combination of options councils could use to fund themselves.

In her speech to the LGNZ conference, Local Government Minister Paula Bennett said councils needed to live within their means.

"Ratepayers are not willing to pay more for services while they see waste," she said.

Local government wages and salaries increased 2.3 percent in the last financial year, she said.

"I expect you to look closely at your costs and have free and frank conversations about what is driving your expenditure."

Prime Minister John Key said that tax exemptions for Crown land had been a longstanding issue, but hadn't happened for very good reasons, including the two-way relationship between local and central government.

Other suggestions for raising more cash include road user charges, fuel taxes, cost-sharing projects with central government, and local authorities receiving a proportion of any mineral royalties.

Auckland Mayor Len Brown welcomed the review document, calling the current ratings system "intrinsically unfair".

LGNZ review's ways to improve funding for councils: