Councils’ purpose needs clarity

BusinessNZ says the purpose of local government needs to be properly established in new legislation:

Chief Executive Phil O’Reilly says the purpose statement in the current Act is very broad and permissive, and has resulted in a number of councils taking on, or investing in, too many non-essential activities exposing ratepayers to unnecessary risk and cost.

“The current Act allows councils to ensure communities’ ‘four wellbeings’ – social, cultural, economic and environmental – and this very broad purpose statement has allowed councils throughout New Zealand to continue to expand their operations into the provision of services which more appropriately should be undertaken by the private sector, if at all. Moreover, councils have backed projects with marginal or negative economic returns. Businesses often bear a disproportionate share of these costs given the significant use of business rating differentials by many councils.

“The Amendment Bill has a more restrained purpose statement and is a significant improvement on current legislation, but should to be tightened further.

“A clearer definition of local government’s important role is essential,” Mr O’Reilly said.

Amen to that.

Although Tourism New Zealand is concerned events and festivals will be at risk.

“The tourism industry is concerned that the Local Government Act 2002 Amendment Bill could restrict councils investing in events, festivals and other visitor infrastructure if it is passed in its present form,” TIA Chief Executive Martin Snedden says. . .

TIA is calling for local government to continue to be allowed to invest in the visitor industry, which creates jobs and income in communities around the country. Support from visitors makes possible a range of events and festivals that residents also enjoy, enhancing that community’s vibrancy and well-being. . . .

Events and festivals do attract visitors and add to the vibrancy of communities but current legislation has enabled councils to back them at great cost with questionable return.

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