Local government funding and financing
The Productivity Commission has completed its inquiry into local government funding and financing and presented its final report and recommendations to Government. The final report, summary material, research reports and submissions are available below.
Thanks to all those who contributed to this important inquiry!
What did the inquiry find?
Radical reform is not required. The current rates-based system remains appropriate for New Zealand. International experience offers no clearly superior alternative.
But there are areas of significant funding pressure. These pressures are highly uneven across councils with small, rural councils serving low-income communities under particular pressure.
Targeted solutions are needed to tackle these pressures. Key recommendations include new tools to help councils fund and manage growth, and additional support from central government to help councils adapt to major pressures, such as climate change.
Councils need to lift their performance to help manage funding pressures. This includes making better use of all existing funding tools. Transparency is key, and a number of recommendations are aimed at improving the transparency of local government funding decisions and performance.
A better relationship between central and local government is essential. An agreed protocol would help end the practice of central government imposing responsibilities on local government, without appropriate funding. The Crown should also be paying for council services it receives on its properties and developments.
Regional spatial planning will better prepare councils for the future. It's a key tool for achieving more efficient use of resources, and better coordination between councils, and local and central government.
Find out more by reading the final report and summary documents:
Our final report has been presented to the House of Representatives and we look forward to the Government's response.
An independent evaluation of the Commission’s performance will now be undertaken and the findings shared on this website.