S&P Says NZ Rates Cap Could Be Credit Negative for Councils
The Executive Wing, left, and the Parliament House in Wellington, New Zealand.
Photographer: Mark Coote/Bloomberg
The New Zealand government’s plan to impose a cap on land taxes, or rates, charged by local councils could be credit negative for the sector unless matched over time with cuts in spending growth, according to S&P Global Ratings.
“If councils are inhibited in their ability to lift future rates, they could struggle to balance the books,” S&P credit analyst Martin Foo said in a statement. “Councils will need to contemplate cost cuts.”