The Auditor General’s office has called the state of local government "concerning", as the system groans under continued pressure.
The Insights into Local Government: 2024 report was presented at the audit and risk meeting at Gore District Council last week.
The report details the myriad challenges councils across the nation are facing, some of which will ring very close to home for the Gore district.
The Office of the Auditor General "remains concerned about the viability of the local government sector", pointing to pressures causing councils difficulty in balancing budgets.
Although the report acknowledges a backdrop of an ongoing recession, growing infrastructure deficits and rising costs, 47 councils around New Zealand did meet their balanced budget benchmarks.
Council debt in New Zealand has doubled since 2017 to $29.9 billion in 2023-24, with a 15% rise in just the year alone.
The Gore District Council’s debt of $58.7 million has been a hot topic, with the council adopting a smaller rate rise of 8.82% for 2025-26 through debt funding during the LTP deliberations.
Savings of $550,000 will be going towards paying down the debt and asset sales are also expected to help bring down the number.
Although some councils, such as the Gore District Council, "maintain strong credit ratings", it states the trend of closing in on self-imposed debt limits can hamstring responsiveness to shocks such as extreme weather events, earthquakes, or asset failures.
Finance costs for the local government sector were also shown to have increased by 70% since 2019-20.
Another concern from the report was the state of infrastructure for councils and the risk of further deterioration of assets, which could be impacted by the potential decrease of additional funding.
Changes to the role of local government, in terms of new water services legislation, RMA and LGA changes, and governance structure is also noted, with auditors working with councils to navigate the finances and manage the implications on LTPs and budget sheets.
The report notes councils will need to "factor the implications of all these changes into their financial planning" and "transparently communicate those implications to their communities".
Performance reporting is also an area for improvement and the report notes an indication "that many councils’ performance reporting systems are still not fit for purpose".
It is not all bleak, as "encouraging" areas such as processing timeframes for building consent applications being met at a higher rate, and improvement of water service targets.
Audit and risk committee chair Stewart MacDonell called the report a "very good summary" of councils and Cr Joe Stringer said the report showed "everyone’s in the same boat".
