In common with many other countries around the world, New Zealand is seeing more people being born, moving into, and living, in cities, along with fewer people living in many rural and regional areas.
There are two broad stories around New Zealand today: one is a story of an increasing population, relatively strong economic growth and, as a result, strong demand for more and better infrastructure and services. The other is a story of rural and regional communities that continue to be vital parts of our national economy and identity, but that do not have the numbers of people they used to.
The information in this article has been sourced from Local Government Funding Review – A discussion paper, published in February 2015. Local Government New Zealand is seeking comment and feedback on the discussion paper. Feedback should be sent to email@example.com by 27 March 2015.
Auckland is the obvious example of a council experiencing rapid growth, and is likely to be home to more than two million people by 2030.
Other parts of New Zealand are also growing, but mostly in urban areas. Currently 67 per cent of the country’s population lives within the Auckland, Canterbury, Wellington and Waikato regions. Queenstown-Lakes, Selwyn, Western Bay of Plenty, Kapiti Coast, Waimakariri, Waikato, Tauranga, Hamilton, Christchurch and Wellington are predicted to have above average population growth.
Thirty-two territorial authorities can expect an absolute decline in their populations between now and 2031. For areas where the population is projected to decline, the challenge is right-sizing the infrastructure and services to fit the current and future population, while finding innovative ways to continue to thrive economically, environmentally, socially and culturally.
Another challenge is that in many cases, areas with declining populations also have a higher than average proportion of elderly people. These areas also tend to have low household incomes.
Higher per person costs for infrastructure
Small rural areas with spread out populations also tend to face higher per-person costs for infrastructure, as fewer people can be served by each part of the network.
A comparison of Clutha District Council with Wellington City Council highlights the diversity of community resources and funding requirements. Clutha is a rural local authority with a population of roughly 17,500, and a large roading network covering nearly 6,400 square kilometres. It spends roughly $14 million, or nearly 44 per cent of its expenditure, on roading and transport. Further, it spends significantly less than the sector average on culture, recreation and sport and economic development.
Wellington City Council also spends $14 million for roading. However, this amount represents just over ten per cent of its budget, which is also close to the amount it spends on recreation and sport.
It’s often smaller, more remote places that get an influx of tourists, and new user-pays methods are emerging locally to fund visitor infrastructure:
Another interesting option to reduce the rates burden on residents is the Western Bay of Plenty District Council’s rates postponement scheme. This gives home-owners aged 65 and over the opportunity to stop paying rates for the rest of their lives.
The aim is to give these ratepayers a choice of paying their rates now or later. Under the scheme, people have the option to postpone payment of all, or a portion of their rates, for a fixed or indefinite period. This is subject to the full cost of postponement being met by the ratepayer (ie interest charges and administrative costs) and Council being satisfied that the risk of loss in any case is minimal.