Councils will struggle to pay for climate adaptation - report

The AM Show 04/07/2019

Local councils struggling to pay for infrastructure upgrades to handle climate change should get taxpayer help, a new report says.

In January, a Local Government NZ investigation suggested it could cost councils up to $13 billion - and a new report from the Productivity Commission argues there's little chance local authorities can afford to foot that bill.

"The major concern is that there are some big costs coming down the track at local councils," chair Murray Sherwin told The AM Show on Thursday.

"Some of the roading infrastructure and some of the water and wastewater infrastructure is likely to be hit. At some stage - you don't know quite when - over the next couple of decades they're going to have to do quite a lot of work."

It's going to be expensive.

"Our sense is that for many of the councils that are hit by this, they'll be struggling to fund it out of their own resources."

If the sea level rises 1.5m by 2100 the cost of replacing council infrastructure would be $8 billion, the Local Government NZ report found.  At 3m, this would rise to $13 billion.

Sherwin says councils can't wait until the effects of rising temperatures are here.

"We've been accustomed to an EQC-type of approach, which is an insurance model - you fix it after the event."

We're not going to be able to rely on insurance for this... we want to build some resilience before the event.

But with some areas likely to be hit harder than others, Sherwin says it might be better for central Government to foot the bill. 

Growing numbers of tourists are also putting pressure on councils, the Productivity Commission says, with Sherwin backing a tourist tax to fund infrastructure in popular regions with small ratepayer bases.

The Productivity Commission's report is only a draft at this stage, and submissions can be made on it until August 29. The final report will be released at the end of November.

The AM Show / Newshub reporter Dan Satherley