Planning Institute

Bye bye excessive development contributions

Policy Parrot says:

Awesome news my feathered friends!

This Parrot has been reservedly cagey about the chances that Minister for Local Government Chris Tremain would do much of substance to sort out the pig?s breakfast that is Local Governance in NZ. Disappointingly past governments have systematically shifted more powers onto Local Government with the intent of making central government?s role more efficient but that has occurred at the expense of local level business and development.

The property industry is typically quiet. Nobody puts their head above the parapet in case it is chopped off by the public executioner for breaching the Tall Poppy Act. So when they are drawn out to have a bitch about matters it is done cautiously and reluctantly or behind the veil of lobby groups like the Property Council or the Planning Institute.

For years however the industry has cried foul over the imposition of development contributions. The former Labour Government can be thanked for the introduction of that nasty surprise that aided local government into a LGA enabled taxing regime on new development rather than an RMA enabled regime using financial contributions. It was fairly well-known that the charges were a rort and the Environment Court had done an excellent job of deciphering the bullshit, reducing payments and making things fair and equitable.

Not so under the LGA. Council?s can make up the contributions without any necessity to consult meaningfully and with no requirement to prove the rates are fair. Income from development contributions generally vanishes into the general slush fund and is washed around to pay for whatever Council treasuries need it for on an annual basis. Lax reporting rules further enhance the ability for Councils to run amok with capital derived funding and generally not have to reveal how the ledger is balanced. ? Read more »