Rating Equity in New Zealand’s Local

ii In New Zealand, councils have a number of different tools to achieve an equitable allocation of rates. Despite increasing debate between councils and ratepayers over funding policy, affordability and the impact on rates, there is limited academic discussion about councils ' funding policies and in particular the principles that inform council decision making in respect to rates. This thesis argues that councils choose between two competing principles in exercising their discretion about rates. One principle is that rates should be set on the basis of the ratepayer‘s perceived ability to pay for council provided activities (with the value of ratepayer‘s property used as a proxy for ability to pay). The other principle is that rates should be based on an assessment of the benefit each ratepayer can be assumed to receive from that activity, or the amount to which that ratepayer creates a need for the particular council activity. These principles are considered in respect to local government in New Zealand