A new UK government proposal on decentralisation could offer New Zealand fresh ideas about how regions are funded and governed, according to commentator Eric Crampton. The central issue is whether local areas should be allowed to retain more of the tax revenue generated within their borders.
The discussion follows the publication of a Cabinet Statement titled “Rewiring the State,” associated with Andy Burnham’s Labour Government. The document sets out a more radical approach to shifting power away from central government and describes a model intended for use across England.
Crampton’s argument is that New Zealand should study the proposed UK framework as it considers the balance between national decision-making and regional autonomy. Giving regions a larger share of their tax income could change incentives and provide local authorities with greater responsibility for their economic and public policy choices.
The proposal therefore raises broader questions about how much power should sit in Wellington compared with New Zealand’s regions, and whether stronger local control of revenue could support a more decentralised system.
