No money, but 10-year infrastructure plans on table for councils with regional deals
Thursday, 22 August 2024
The Government is putting 10-year infrastructure plans, better revenue gathering tools, but no money on the table for councils with regional deals.
Local Government Minister Simeon Brown on Thursday morning published early details of the regional deals the Government is promising to strike with councils, a day after Prime Minister Christopher Luxon railed against councils building “white elephants” and declared “the days of handouts” are over.
Speaking to mayors and councillors at the Local Government New Zealand conference in Wellington’s Tākina convention centre, he said the deals would “transform” the way central and local governments partnered on economic growth, transport and house building.
“Our goal is to shift the dial locally and nationally on infrastructure projects by focussing on cutting red tape, supporting regional development, and growing the economy.”
Each deal would include a negotiated 10-year plan, based on a 30-year vision for the region. Regions seeking a deal will have to demonstrate have the potential to grow, are fiscally prudent, and are committed to the Government’s water and housing reforms.
Five regions, yet to be announced, would first be invited to put forward high-level proposals for regional deals. The Government would be seeking to strike deals first with councils that are growing.
“We don’t want extravagant glossy documents … developed by consultants. We’re looking for simple in-house proposals to finalise the first deal by the end of 2025,” he said.
According to a 28-page document published by Brown outlining the regional deal framework, various funding tools could be wrapped into the regional deals to allow councils to afford agreed upon infrastructure and other investments.
Funding tools might include value capture (or a levy on the beneficiaries of new infrastructure), targeted rates, greater ability to toll of roads or impose congestion charging, as well as diverting existing government funding streams such as the tourism levy, and sharing royalties earned on mining.
Brown said providing councils some of the GST earned on new houses and new levies advocated for by councils like a “bed tax” on tourists could be part of the conversation.
“This framework is just the beginning. We want a productive relationship with local government, enabling growth development and providing the tools to fund it,” he said, in his speech.
“But my message is clear and echoes the prime ministers, we will only finalise deals with regions that focuses on the basics and are committed to spending ratepayers money responsibly.”
After his speech, Brown told reporters the deals would be used for priorities: core infrastructure, roading, new land for housing, and economic growth.
“We’re not going to be using these deals to build flashy convention centres.
“This is not about cash handouts. There is no magic money tree here in Wellington.”
He said the Government’s hardline message to mayors and councillors this week were “reflecting what the ratepayers and taxpayers of New Zealand are thinking” when the average rate increase was 16%.
“We are expressing the views of New Zealanders. We're putting in place accountabilities, but we're also turning up with funding and financing for water infrastructure and a regional deal partnership which will help to have those longer term arrangements between central and local government.”
LGNZ president Sam Broughton, who is also the Selwyn mayor, said the regional deal framework was a “great win” for local government, as it incorporated much of what his advocacy organisation had wanted.
“We do need to make sure that this is available to all New Zealanders and so over time, [we’ll be] thinking about how it's not just one or two places that can benefit from city and regional deals.
“If we're going to see deals that are sustainable, they need to last beyond each term of Government, and so [we want] buy in cross party from each of the political parties.”
Speaking on stage after Brown, Central Hawke’s Bay Mayor Alex Walker told the audience, and the minister, said there were highly-skilled professionals in the room governing highly-complex businesses.
“I think what we’re seeing has been a respectful interchange of government and local government, sometimes agreeing to not agree.
“There are plenty of places where we can have alignment.
“But we also know in local government that there is a lot of anger and a lot of distress in our communities right now.
“What we do at a local level, inspiring hope, inspiring vision and creating a truly vibrant way for our communities to move forward will be how we create a resilient country.”