Growth funding in Budget a good start

LGNZ welcomes new funding in today’s Budget to incentivise councils to enable growth, but says the Government needs to build on this in future years.

“We are pleased to see the Budget allocate up to $400 million across four years so that councils and developers can better fund the pipes, roads and other infrastructure needed to support growth,” LGNZ President Rehette Stoltz says.

“Today’s Budget acknowledges the difficult situation facing councils that want to enable growth in their regions. It’s encouraging to see some consideration has been given to funding the infrastructure needed for growth.

“While this funding would not provide as much incentive for councils to enable housing growth as sharing 50% of GST would, it is a step forward.

“We know that the Government is working through further policy details and we would welcome the opportunity to work with them to ensure that this policy delivers real benefits for our communities.

“LGNZ has long advocated for a range of funding and financing tools that best suit councils’ and communities’ needs. For councils where there is a need for growth, today’s announcement will come with benefits; but for other councils, alternative funding options must be made available.”

Councils will receive payments based on a proportion of the national average new dwelling consent value. That funding will help councils invest in the roads, services and local infrastructure needed to support growing communities.

The funding must be used for infrastructure-related expenditure, and councils will be required to report annually on how they have used funding, to demonstrate that they are addressing growth impacts.

“For this funding to have real impact, it is essential that any requirements tied to it are proportionate to the scale of funding allocated,” Stoltz says.

“Given that this is this Government’s last Budget this term, this was the last opportunity to address the funding required to implement the raft of reforms that are underway to the local government sector, such as resource management, emergency management and simplifying local government. Given this isn’t addressed, a lack of funding or other funding and financing tools may result in services being reduced or cut.”

LGNZ acknowledges other Budget support for local government:

Fuel-related costs for public transport

“Diesel prices have risen by around 34%, contributing to overall public transport costs being 5% higher than a year earlier in the March 2026 quarter. The Government’s commitment to support public transport authorities to help manage fuel costs pressures and maintain services comes as a welcome relief, and may help councils avoid increased rates or charges for our communities. But we need to understand the total funding allocated in order to assess the impact this will have on public transport providers and regional councils,” Chair of Environment Canterbury and the LGNZ Regional Sector, Deon Swiggs says.

Funding towards the reform programme

“Local government is facing a raft of reforms, including resource management, emergency management and Simplifying Local Government,” Stoltz says.

“While today’s Budget includes funding towards a centralised digital planning platform and practical guidance for councils to transition to the new resource management system, it is disappointing to see that direct funding of the costly transition associated with these reforms has not been accounted for.

“If the Government wants these reforms to succeed, councils need certainty and support to deliver them.”

Contributions towards emergency management 

“Already in 2026 there have been 21 local states of emergencies. The Budget’s contribution to Mayoral Relief Funds to support response and recovery activities relating to local emergencies is a timely support for communities across the country.

“While it is good to see that $400 million has been set aside for state highway resilience projects to help keep critical routes open during and after severe weather events, there is just as much need to increase the resilience of local roads.

"We have seen over recent years that the budget for emergency works for councils to restore transport infrastructure damaged by severe weather events has been heavily oversubscribed.

“The Government is also investing in better hazard information across the country, including the development of the first New Zealand Flood Map, which will support councils to make informed decisions.”

Investment into wilding conifers control

“We’re happy to see an additional $70 million, bringing the total to $109.2 million to support the continued control of wilding conifers. This important work protects productive land; supports biodiversity, tourism, and water availability; and reduces wildfire risk,” Chair of Environment Canterbury and the LGNZ Regional Sector, Deon Swiggs says.