Local government reforms announced today will be positively received by business, says BusinessNZ.

BusinessNZ Chief Executive Phil O’Reilly says local government has a major impact on business and it is important that the sector operates appropriately and efficiently.

“Some of the local government practices that impact negatively on business include unnecessarily high rates, disproportionate development contributions and the tendency for local government to displace or ‘squeeze out’ local businesses.

“These practices have the effect of choking small local businesses or reducing their profitability, and that means less prosperous communities.

“So it is critically important that local government becomes refocused on its core activities – local infrastructure, public services and local regulations – and the reforms to achieve this are welcome and overdue.

“The proposed law change to introduce limits on council spending and debt levels is well-conceived. Limiting growth in council spending to no more than inflation and population growth, but with exceptions for extraordinary items such as disaster recovery, is practical and far-sighted.

“Inviting the Productivity Commission to advise on the best split between central and local government activities will help achieve a more considered frame work within which local government can efficiently operate.

“The reform programme announced today deserves widespread support,” Mr O’Reilly said.

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