Calls for major reform of local government

8:03 pm on 22 December 2020

The way the country's councils are funded and operate desperately needs an overhaul, with outdated legislation among a long list of problems, a new briefing paper to the minister of local government suggests.

Minister for Maori Development and Local Government Nanaia Mahuta.

Minister of Local Government Nanaia Mahuta. Photo: RNZ / Richard Tindiller

The latest BIMs, or briefings to incoming ministers, were released last week. They usually make for interesting reading and provide an insight into what the officials think are the most pressing issues for the next term.

A report to Local Government Minister Nanaia Mahuta from the Department of Internal Affairs raised several problems facing local and regional authorities around the country that need to be addressed.

"The legislation relevant to the governance system of local government is becoming increasingly inadequate in supporting robust and transparent community representation and decision-making," the paper said.

"The roles and responsibilities of councils have and will continue to change. As such, governance requirements need to be updated too."

The report suggests changes to the Local Authorities (Members' Interests) Act 1968, obligations relating to meetings and long-term planning under the Local Government Act 2002, as well as the Local Government Official Information and Meetings Act 1987.

It also calls for a review of Auckland's governance arrangements.

"Auckland Council was established as the unitary authority for Auckland in 2009 and has specific legislation regarding its operation that does not apply to other local authorities.

"This legislation has restricted the ability of Auckland Council to adjust aspects of their governance arrangements (such as the number of councillors and boundary issues) in the way that other territorial authorities are able to do.

"Given that the new Auckland Council has been in place for over a decade, we consider it timely to review the settings to ensure the council is well positioned for the future."

Local Government New Zealand (LGNZ) president Stuart Crosby agreed there was a need for reform, with major problems that needed to be worked on over the next term.

Crosby is the former mayor of Tauranga City Council and has seen first hand what does and does not work in local government.

He said central government needed to clarify the role of councils and come up with a more sustainable funding model for local government.

Relying on rates as a major source of revenue would not do in 21st Century New Zealand, he said.

"The funding levers we have, have remained the same for the last 50 years but the services we are required to provide in local government have grown."

He said successive governments over the years had looked at the massive growth costs of the major centres, like Auckland, Hamilton, Tauranga and Queenstown, but to date no real solutions had come to fruition.

Crosby said if central government wanted more housing and development it needed to realise it would come at a cost.

"You can't ask for more housing and not provide the infrastructure to support it."

He said whether it was through use of special purpose vehicles or value uplift taxes, new sources of revenue were needed beyond just council rates and fees.

He also agreed that reviewing the legislation that created the Auckland supercity should be a priority.

"That's a big piece of work that has an impact on 1.5 million people. Is it working and can it be improved upon? Every 10 years it's good to review these big pieces of legislation."

Stuart Crosby

Stuart Crosby. Photo: RNZ/ Andrew McRae

Despite the massive issues at stake, he was confident the government could deliver.

"We're hopeful that over the next 18-24 months there will be some movement on these issues."

Not everyone was as optimistic as Crosby. Massey University academic and local government commentator Andy Asquith​​ said he doubted any major changes were on the cards - despite being sorely needed.

"The local government system as it stands in New Zealand isn't fit for purpose. But nothing will happen with local government in the next three years because the minister has too much to do."

He said Mahuta would have to juggle the role with her other responsibilities as the Minister of Foreign Affairs.

"Local government isn't seen as important, even though it's very important in our day-to-day lives," Asquith​​ said.

"But local government doesn't help itself a lot of the time."

Asquith​​ said most of the local government structures now in place could be traced back to the reforms of the late 1980s, but a lot of it was not relevant or applicable in 2020.

He agreed that there was a need to overhaul some of the key pieces of legislation covering how councils operate, such as the Local Government Official Information and Meetings Act.

Asquith said too many councils were using closed-door workshops to exclude the public when discussing important issues.

Dr. Andy Asquith, Massey University local government expert.

Dr Andy Asquith. Photo: Supplied

As a result Asquith said there was a need to change the Act to increase transparency and accountability, and the legislation that created the Auckland supercity also needed to be looked at.

"It was steamrolled through and the fact Auckland still works is a bloody miracle because the system that was put in place by Rodney Hide was doomed to fail."

In a statement Mahuta said she agreed there were major issues that needed to be looked at.

"Some aspects of the local government framework have gone unchanged for some time and could be due for modernisation," she said.

"This includes elements of the Local Government Act 2002, the Local Authorities (Members' Interests) Act 1968, and the Local Government Official Information and Meetings Act 1987.

"Ten years on, there is also a case for taking another look at elements of Auckland Council's legislative settings, to ensure the council can effectively meet its governance obligations.

"I am considering my immediate work programme priorities for this parliamentary term. The government is making good progress in a number of local governance areas that are facing significant challenges."

She said a particular focus would be on the Three Waters reforms.

Auckland Mayor Phil Goff said an overhaul of the legislation which created the supercity would be welcome.

"Changes to bring the legislation governing Auckland Council into line with all other councils by giving it the power to determine the size of its council membership is totally in line with Auckland Council's policy and will be welcomed by the council.

"More important changes for a city which makes up 34 percent of the country's population and pays 50 percent of its taxes would be a government decision to devolve revenue from central government to our council."

no metadata

Local Democracy Reporting is a public interest news service supported by RNZ, the News Publishers' Association and NZ On Air.