Proposed rates cap regulator could play a key role in protecting essential infrastructure investment

The Government’s proposed rates cap regulator could play a key role in ensuring essential council infrastructure is fit for the future, LGNZ says.

The National Infrastructure Plan, released today, has outlined “formidable” challenges New Zealand faces.

Building and maintaining infrastructure is becoming more expensive, weather events more severe, and what we already have is wearing out.

One of the plan’s ten priorities for the next decade is to prioritise adequate maintenance and renewals so there is enough funding to prevent asset deterioration and costly reactive fixes.

LGNZ President Rehette Stoltz said councils want rates to be as low as possible.

"While we understand that’s what the Government is trying to achieve with rates capping, we don’t think it’s the right approach because it takes decision making away from local communities."

If the policy progresses, flexibility is crucial to ensuring rates caps do not constrain the action needed to meet pressing infrastructure needs, Stoltz said.

“A well-designed regulator could help avoid some of the unintended consequences of rates capping experienced in overseas jurisdictions.

"The regulator could play an important role in assessing and reporting on investment in maintenance and renewals to help the Government realise its ambitious plan for high-quality infrastructure.

“This should be enabled through legislation and will be particularly important when it comes to determining rates cap variations.”

Keeping rates low is a priority for all elected members, Stoltz said.

“Our communities’ expectation is also that we deliver the basics people rely on.

“We want to work with the Government to build a regulator that supports responsible investment and protects essential services for future generations.”