Government announces new financial performance regulations for local government

Ratepayers will be able to keep a closer eye on their councils’ financial positions thanks to a new set of financial prudence regulations for local government, says Associate Local Government Minister Peseta Sam Lotu-liga.

“The regulations will help showcase best practice and excellence in local authority financial management. They will also improve transparency and promote more informed debate about the prudence of local authority financial management,” the Associate Minister says.

The regulations will enable the first systematic analysis of local authority financial management in New Zealand.

“They will provide new insights into local authority financial management which will help improve decision-making at the local level.”

The new regulations set seven benchmarks which address the affordability, sustainability and predictability of local authority finances.

“Local authorities will report against these benchmarks through graphs in their planning and reporting documents. This will mean both the current position of a council and the past and projected trends in its financial management will be more transparent to ratepayers.”

Mr Lotu-liga says councils will publish the first results using the benchmarks in their annual reports for the 2013/14 financial year, and these must be adopted by 31 October 2014.

“The development of these benchmarks fits with the government priority of responsible management of government finances and is aligned with other local government reforms.”

The regulations were developed in consultation with Local Government New Zealand (LGNZ). Mr Lotu-liga said officials will work with LGNZ to develop ways of interpreting and publishing the results of the benchmarks.