Matt Cowley Tauranga City Councillor

Improving housing affordability, economic prosperity, and quality of life are common goals Tauranga City Council shares with Central Government.

But there seems to be an ingrained tension between the two layers of government, regardless of whoever is in power.

Last year, Finance Minister Bill English suggested councils' planning rules have done more to increase income inequality and poverty in New Zealand than most other policies.

I believe councils' inability to free up housing supply to meet population growth spurts is a symptom of a larger problem caused by the archaic financial tools available to Local Government.

For instance, councils are expected to play banker by providing lead infrastructure for new developments. But the long payback periods burden council with risk if the development is not completely successful.

If a development is not fully sold as initially agreed, then council cannot make up the funding shortfall for the local infrastructure – think roads, water, reserves – on a neighbouring development.

About $30 million of growth-related debt during the last decade cannot be recovered from development contributions, as planned. The debt has now been transferred to general ratepayers.

Local Government NZ is reviewing a way forward by considering the current and likely future funding shortfalls across the Local Government sector.

The review is examining issues facing local funding, and considers alternative funding for increasing community demand on services and infrastructure – and incentives to drive economic growth.

An example being investigated by LGNZ is local communities retaining the Goods and Services Tax paid on local infrastructure. This will help deliver local infrastructure to free up more housing supply.

Central Government's current funding for local infrastructure is limited to transport subsidies, civic services, broadband and some economic development projects.

This column, much like LGNZ's funding review, is not trying to pick a fight with Central Government for more funding.

It's extending an olive branch to Central Government so we can find a genuine solution to fix problems of mutual benefit.

The elected members are building good relationships with the three local MPs. We meet regularly throughout the year. After all, we represent the same communities and have their best interests at heart.

Feel free to email me your thoughts (matt.cowley@tauranga.govt.nz), call/text me on 027 6989 548, and follow me at www.facebook.com/a.younger.voice.