Finances top issue for talks with govt

All councils struggling with financial pressures

Many councils are at a financial tipping point, so a conversation with the new Government is essential in the coming months

As I write this opinion piece, we still do not have the make-up finalised for our new Government although reportedly we are close, with only three sticking points. The appointment of ministers, especially the Local Government Minister, is awaited with much anticipation within the sector as we believe it will signal to communities how seriously the partnership between central and local government is being taken.

Recently I attended a sector meeting where councils were giving the brief: “What are councils’ expectations of the newly elected Government?” We face a number of issues but the critical one is how we deal with the increasing financial pressures we are all under and how the current financial model for local government is no longer sustainable.

As you can imagine, those on the East Coast are particularly concerned about the impacts and the many years of recovery they are facing from Cyclone Gabrielle. The repair and restoration of infrastructure and property will be a huge challenge for those councils and their communities.

Here in the Horowhenua, we are fortunate we don’t have recovery challenges - but we do have other challenges a new Government can certainly help with. We are a growth district at the moment and now we have some certainty O¯ 2NL is progressing, we know that growth will continue.

We need a financial model that enables us to manage and prepare for growth. Tara-ika is a good example. The partnership that was established between Crown Infrastructure Partners and the council, with funding arrangements split, has enabled the infrastructure to be delivered much sooner than it would have otherwise. Not only that - it also presented a masterplan for managing the development in a much more structured and positive way.

As we saw during the election, the issue of planning for and building infrastructure across the country is a significant challenge. As a country, we have not done this well in the past, and the investment required to catch up and build what we require today, and then prepare for the future is causing massive financial pressures for councils and ultimately, ratepayers.

Many councils are at a financial tipping point, so a conversation with the new Government is essential in the coming months on what the future looks like in this infrastructure space. What councils have been signalling for some time is that the reliance on rates as our only source of revenue cannot be sustained. The cost of building this infrastructure, the resultant increase in debt, the cost of interest on that debt and then the cost of depreciation of the asset means that as we develop our next Long Term Plan, we will need to have some hard conversations with our community on how we manage this.

One thing for certain, though, is that whatever the issue, the expectation a new Government will solve it all is a little naive and we need to all be prepared to play our part in ensuring we plan for the future well.