Local bodies ‘almost in despair’ over funding

Press, 7 May 1980, Page 7

Local bodies ‘almost in despair’ over funding

Cities and boroughs faced with increasingly unpopular rates rises are “almost in despair” about the Government’s attitude towards local-body fundinc, according to the Mayor of Hamilton (Mr R. Jansen). Mr Jansen confirmed that there was no remit on revenue sharing at the recent Municipal Association conference in Rotorua. Revenue sharing — the allocation of a percentage of income tax to local bodies with no strings attached — has come up every year 1 at the association’s conference, especially since two Governm e n t-appointed com» mittees have advocated it in recent years. Mr Jansen said -local bodies would now have to change their tactics, and ask for higher subsidies on services essential to

the community’s health, and a clampdown on the interest rates local bodies pay for loans. A Government working party was due to consider the whole question of rating. Mr Jansen said this should take place as soon as possible. He said that most localbody work, even projects of national importance, such as cleaning up the Wakato River, had to be paid for by the ratepayer. “Hamilton has been saying strongly that the rating of land should not be the only basis for local body funding.” If local government interst rates rose any higher, the Hamilton City Council might have to consider deferring capital projects, he said. “I cannot understand why the Government is holding back on revenue sharing, unless there are

fears that income tax might have to rise to meet the shortfall .this would create. “The system is used in other countries — Australia, the United States, and Britain — and very effectively, too.” Mr Jansen said the Municipal Association was “almost in despair” over the fate of its constant pleas, and no remits would go forward this year. Mr Jansen will write to the Minister of Local Government (Mr Highet) seeking clarification of the Government’s plans to change the law on differential rating. Mr Highet told the conference the changes would require differential rating to be based on land use, zoning, and the area of properties rather than on the value of properties.