I attended Local Government NZ’s Annual Conference in Wellington last week with the CEO, Deputy Mayor and Councillors Rollo and Brand. We got a blunt message from the PM about rates rises, an announcement of significant changes to the Local Government Act and details of a new policy on regional deals.
It came as no surprise to me to hear the PM telling councils that we need to work harder at keeping rates affordable and to focus on core services. New Zealand is facing tough economic headwinds from the spike in inflation and large government and balance of payment deficits. Households, businesses and central government have all had to trim their spending. It is fair to ask councils to do our share.
I was embarrassed at the reaction of some local government leaders to the PM’s message, particularly those from Wellington who slammed it as “mana diminishing” and “paternalistic”. The evidence of a problem was obvious with a burst water main outside the flash new $180 million Tākina convention centre. The redevelopment of Wellington Town Hall, just a block from the conference, has blown out in cost from $32 million to $300 million.
The PM announced that the purpose of councils would be narrowed in the Local Government Act from the current broad requirement to promote the social, economic, environmental, and cultural wellbeing of communities. I support the change as the current law sets up councils to fail. Our revenue from rates is only 2% of GDP. The current law creates an expectation that we fund a lot more activities, which pushes up rates. We need to prioritise the infrastructure and services that only councils can provide.
The Government proposed a new tool for local and central government to work together called “Regional Deals”. Last year’s conference included a presentation from Manchester in the UK on how these long-term agreements between councils and government had delivered economic growth and co-ordinated infrastructure delivery. They have also worked well in Australia. Our Nelson, Tasman and Marlborough councils work well together and have shared aspirations. We have already started discussions on taking up this opportunity.
