Government’s pivot on rates ‘pragmatic’ but concerns remain

LGNZ says the move away from a rates cap to a ‘rates band’ promises greater flexibility but the band will restrict investment in core services like roads, bridges and public transport.

The Government has announced it will set a range for annual rates increase, with the full policy taking effect in 2029. It had previously indicated core infrastructure would be excluded from this policy.

LGNZ Interim Chief Executive Scott Necklen says LGNZ has been working to inform the Government around the severe shortcomings of the New South Wales rates capping model.

“Everyone wants to keep rates low. The New South Wales model is bogged down in bureaucracy.

“We need a common-sense, fast-track process for exemptions that enables investment in key infrastructure in economic growth in the regions, or when responding to natural disasters,” says Scott Necklen.

“The Government has heard concerns from LGNZ, economists and the infrastructure sector since it announced its intention to explore a rates cap.

“Minister Watts has moved away from the ‘hard’ rates cap model that wreaked havoc in New South Wales, with the crippling impact on council services and infrastructure maintenance being well-documented.

“He’s taken a pragmatic route and we want the same pragmatism to apply to exemptions.

“We will be working through the policy detail and with our members – and taking that feedback to the Government.”

LGNZ Vice President Rehette Stoltz says that councils like Gisborne District are rebuilding their infrastructure following multiple severe weather events, so the policy needs to recognise the specific needs of councils.

“Keeping rates low is a priority for all elected members. Our community’s expectation is also that we deliver the critical infrastructure and services they rely on in a timely way,” says Rehette Stoltz.

"These are the sorts of considerations we will be working with the Government to implement.

“We will also continue to have broader conversations with Ministers about local government’s funding model.”