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Councils target tax take

Mayor of Carterton John Booth and Masterton Mayor Lyn Patterson, say Localism Project was well received at the Local Government New Zealand conference. PHOTO/FILE

PAM GRAHAM
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A change in how councils raise money could see regions such as Wairarapa using a share of taxes rather than rates to fund activities.

That’s the aim of a push to shift power from central government to the regions via a Localism Project launched at the Local Government New Zealand conference.

It’s a project being run jointly with think tank the New Zealand Initiative, and Carterton Mayor John Booth said the idea was well received at the conference in Christchurch.

Dunedin Mayor Dave Cull, the LGNZ president was quoted as saying the group was agnostic about the mechanisms to achieve a rebalancing of power from central government to regions.

“The principal is we have to be able to raise funds at a local level in ways that we can’t at the moment.” he said.

Ratepayers “can’t keep affording the rise and rise in rates”.

He wouldn’t go into detail on alternatives to funding, but it could be a share of taxes such as GST or tourist taxes.

Booth said he was very interested in the project, and his Masterton counterpart Lyn Patterson said 88 per cent of public expenditure in New Zealand was by central government, much more than in many other countries.

“This is a concept that maybe we need to start working with central government and looking at how we can progress making some of those decisions more locally and devolving some of those responsibilities locally.”

She said it was a “think piece” about whether centralism was a good thing and whether some of the functions could be devolved and with little detail beyond that.

According to the Localism Project, in countries such as Finland, only 29 per cent of public expenditure was under central control, while in Germany it was low as 19 per cent.

“After more than a century of centralism, New Zealand needs to go local,” NZ Initiative executive director Oliver Hartwich said.

“Councils and communities must be able to make their own decisions about their future.”

Mike Reid, a policy adviser with the group, agreed with the suggestion it was a modern version of the regionalisation policies.

The situation in New Zealand of central government “running everything” was a “very strange”.

“It is a very big discussion, which may take 20 years,” he said.

In a position statement, the group said, “The issues facing New Zealand are simply too complex, varied and multi-faceted to be successfully addressed by a single government in Wellington”.

It said the “top down”, one-size-fits-all approach didn’t work, and public policies and programmes should be created from the “bottom up”.

The group said centralism was not the best way to deal with local issues, with local government closer to the people it served.

In Germany, there were 5.5 million public servants at the state and local level and only 725,000 at the federal level, while Switzerland had even a greater level of localism than Germany.

The UK Localism Act introduced a range of measures to shift authority and decision-making from Whitehall and central government to local governments and communities.

“It is driven by a firm belief that shifting decision-making to the level of government that is in closest proximity to citizens will result in better public decisions and services better targeted to the needs of users,” Malcolm Alexander, the chief executive of LGNZ wrote in the forward to a report on the potential for localism in New Zealand.

A localism summit will be held in February, with a discussion paper due to be launched at next year’s LGNZ conference.

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