Economic growth plan reinforces Rotorua direction
21 July 2015
A local government plan to stimulate economic growth and strengthen local communities has reinforced for Mayor Steve Chadwick that Rotorua is on the right track.
At its 2015 conference in Rotorua today [Tuesday 21 July] Local Government New Zealand (LGNZ) launched a 10-point plan to give councils greater flexibility in how services and activities are funded. A key aim is providing an environment that supports local government's ability to partner with others to efficiently achieve shared goals, and provides incentives for all parties, to encourage local economic growth. The plan includes establishing Special Economic Zones to test ideas.
While property rates should remain a cornerstone of council funding, local government needed a wider set of funding sources at its disposal, LGNZ president Lawrence Yule told conference delegates today.
He said a strong, incentives-based regime would create greater innovation in service provision, a more diverse range of available funding and better local and central government performance.
Mayor Chadwick said the plan supported Rotorua Lakes Council's direction.
Our council is perfectly placed with our shared priorities and partnership approach, she said.
We are a year-and-a-half along on our Rotorua 2030 journey and what I'm hearing at this conference acknowledges what we've been saying - that we need to find different ways to meet - and fund - local needs, including through partnerships with public and private sector funders.
We already have some very good examples in Rotorua of innovative partnerships, Mayor Chadwick said, citing the planned child health and library hub in the central city as one example.
The project is a partnership between Rotorua Lakes Council and central government-funded Lakes District Health Board to establish an innovative, shared facility within the city's library building to meet current and future community needs.
The successful Famously Rotorua tourism promotion campaign, jointly funded by council business unit Destination Rotorua and tourist operators was another example of innovation that was leading to economic benefits for the district, the Mayor said.
Achieving our long-term aspirations for Rotorua will rely on innovation and collaboration - partnerships with our community, with business and private investors, philanthropic organisations, other councils, central government and overseas parties.
In terms of what's proposed in LGNZ's 10-point plan, we could explore the possibility of being a "special economic zone" around our drivers of growth - tourism, wood and geothermal, she said.
With regards to levies and the like, those are things we would need to consider if and when they became funding options. In the meantime, we're already being innovative, looking for Rotorua-specific solutions and funding.
The point is that local government needs a wider range of funding options to bring about the change our communities want and need, Mayor Chadwick said.
Local Government New Zealand's 10-point plan, Incentivising Economic Growth and Strong Local Communities, follows a review of local government funding and is guided by four key principles:
An effective partnership between local and central government around shared goals and strategies, pragmatic testing of new ideas, and strong performance incentives;
Recognition of the value of the private sector and community by recalibrating relationships with those sectors to incentivise partnerships and the achievement of shared goals;
A local government which is open to innovation in service delivery, funding and financing; (within an environment of strong fiscal discipline);
A diverse set of funding tools for New Zealand communities to respond to different challenges, with property rates supplemented by revenue sources that enable local communities to meet current and future opportunities.
Councils and communities needed to be able to manage significant issues like regional economic development, demographic shifts, climate change and technological advancement, Mr Yule said.
We need strong collaboration with Government and private sector partners.
The review was about fit-for-purpose funding options rather than increasing taxes or funding.
The right incentives can create greater innovation in service provision, and provide a more diverse range of available funding tools. LGNZ anticipates a productive and constructive discussion between local and central government, business and communities, to address the [LGNZ] proposals and to implement the solutions communities need, Mr Yule said.
The 10 proposals in LGNZ's plan are:
1. An agreed priority and action plan to advance special zones for growth to test new ideas and drive economic prosperity.
2. Mandatory cost benefit analysis and agreed cost sharing with central government when new centrally imposed costs are considered (particularly where national benefit applies).
3. The removal of mandatory rating exemptions.
4. A simplified application and administration process for rates rebates to increase uptake.
5. Better guidance to help councils make decisions on trade-offs about whether to fund services from prices (user charges) or taxes.
6. Road user charges, targeted levies and fuel taxes should be allowed where these are economically efficient.
7. Councils should be able to retain a share of any value uplift arising from additional economic activity related to local intervention and investment.
8. Local authorities should receive a proportion of any mineral royalties from local activities.
9. Allow councils to levy specific charges and taxes on visitors where economically efficient.
10. Reconsider the decision to limit the range of community amenities funded through development contributions.
Go to this link for more information on LGNZ's government funding review 10-point plan.