P.M. deals blow to local bodies’ hopes

Press, 14 June 1978, Page 6

P.M. deals blow to local bodies’ hopes

PA Dunedin Local government hopes for revenue sharing suffered a set-back from the Prime Minister (Mr Muldoon) yesterday.

He said that where there; was scope for reasonable rates increases, local authori- i ties would have to look at these before they could expect the Government to foot the bill. Mr Muldoon’s comments came in a speech at the opening of the annual conference of the Counties Association, in Dunedin. He spent most of his speech on local government finance, referring in particular to revenue-sharing, the, system in force in Australia! where a fixed percentage of' central Government tax i revenue is earmarked fori local government.

Adherents of revenuesharing argue that land rating is an outmoded system of financing local government and that the cost of local

government is not spread

fairly under the present system.

An attractive feature of revenue-rating is that in in-1 flationary times it guarantees i automatic growth in local' government revenue. Mr Muldoon said there | W’as no chance of the Gov-1 ernment’s being able to | accept at this time that a fixed percentage of taxation I receipts should be earmarked for local government. He was I equally unsure that the .Government would apply the principle of revenue-sharing iin that way when economic circumstances permitted. “After all, revenue-sharing jin a very practical way is (already in operation in this (country,” he said.

It was estimated that in this financial year 5133.6 M would be paid out to local authorities from central government revenue. This figure included National Roads Board subsidies, estimated at S63M, “If this is not revenue sharing, I don’t know what is,” Mr Muldoon said. Local authorities should

also keep in mind the present philosophy of devolution, which meant less central government involvement in local affairs and more responsibility being exercised at the local level. “This surely applies as much to revenue raising as it does to expenditure and local government determination of priorities,” he said. Mr Muldoon emphasised that local government authorities should look more I closely at their expenditure j rather than to the central (government for grants-in-aid i and other forms of assistance.

The counties should scrutinise in close detail every item of expenditure to see whether long-standing activities and programmes could be stopped. “Then you should also look to see if you are really getting value for money from your existing programmes and activities," he said. Mr Muldoon suggested that reappraisals of that nature could produce the finance needed.