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Draft report - Local government funding and financing

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New Zealand Productivity Commission

Date published

4 July 2019

The Commission finds that the current funding and financing framework measures up well against the principles of a good system. The current system, based on rating properties, is simple and economically efficient, compared to alternatives. We recommend that the current system should therefore remain as the foundation of a fit-for-purpose future funding and financing system for local government.

However, councils need new tools to help them deal with some specific cost pressures. New funding tools are required in four areas:

  1. Supplying enough infrastructure to support rapid urban growth;
  2. Adapting to climate change;
  3. Coping with the growth of tourism; and
  4. The accumulation of responsibilities placed on local government by central government.

There is also significant scope for councils to make better use of existing funding, and improve their organisational performance, productivity and decision making.


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