How will you pay for bigger budgets for local authorities?

How will you pay for bigger budgets for local authorities?

Answer

The exact mechanism is subject to debate. Several experts have suggested giving local authorities the GST on new builds, while Infrastructure NZ has suggested that regions should bid to a fund. TOP’s proposal is a hybrid of these two ideas.

Infrastructure is a long-term investment. If the business case stacks up, it should be permissible to fund infrastructure by taking on debt – particularly while interest rates are as low as they are now. The Government’s debt position is viewed very favourably by most international rating agencies. The extra investment we are talking about here should not increase New Zealand’s debt as a percentage of GDP in the long run, as economic growth should generally be greater than increasing debt.