Good evening, and thank you for the invitation to join you here today.

I want to talk to you tonight about the reform of Auckland governance.  I'll also talk about some of the general reforms we have planned across the local government sector, as these reforms will impact on the transport sector.

If Auckland's economy thrives, New Zealand thrives.  That's why the Government is determined to set up governance arrangements that enhance the productivity and competitiveness of Auckland's businesses, and ensure the region's facilities are operated to maximise economic development, tourism and events. 

We had the Royal Commission report on Auckland, and the Government made a number of decisions as a consequence of that, which we have been very busily working on.

I'm not someone who believes that bigger is necessarily better, but I believe simple is certainly best.

I never understood why it took so many politicians to run Auckland, and why it needed seven mayors and a chairman.

It seemed to me that as Auckland is one region, the simple solution is to have one council, one Mayor, and one plan.  That's what the Royal Commission recommended, and that's what the Government is recommending.

Auckland's future depends on critical decisions being taken at a regional level.  Our view is that region-wide decision-making must have region-wide governance arrangements to overcome the competing interests, parochialism and factionalism that has held the region back for too long. 

These issues are also important in the way councillors are to be elected.  The Government supported the Royal Commission's recommendation for some councillors to be elected from wards and some to be elected ‘at large', but we chose to shift the balance in favour of local communities through having 12 from wards and 8 ‘at large'. 

I'm looking forward to reading the submissions that come in on this matter.

We have also enhanced the Royal Commission's recommendations in respect of community representation. 

Just as region-wide issues need region-wide solutions, the functions that are best performed at the local level should have local advocacy and decision-making. 

To ensure strong community representation we have proposed 20-30 local boards, to develop local policies and advocate to the council for community needs.

Work is underway to determine what statutory roles and functions these local boards will have, and this is something else I'm looking forward to reading the submissions on.

We want the local boards to have some real power and some real say, and to reflect the different communities that make up our region.

Transport, as you will all appreciate, is one of the biggest issues facing Auckland. 

The Royal Commission noted issues with a lack of integration between transport modes, slow decision making and the complicated nature of current governance arrangements. 

It recommended establishing one Regional Transport Authority with responsibility for arterial roads and public transport.

The government has decided that local authority transport functions should be managed by one entity to overcome problems of fragmented decision making.

The government has made an ‘in principle' decision that a Regional Transport Authority has responsibility for local authority transport functions.

We have modified the Royal Commission's proposal by leaving the responsibility for the rail corridor and state highways with the relevant central government agencies, recognising the fact that these are national networks that are nationally funded.

We have also proposed including local roading operation within the Transport Agency. 

However, spatial and local planning roles will be retained by the unitary council and the local boards, to maximise political and community input to the planning processes.

Having one consolidated local government transport body will result in more integrated provision of local road transport services. 

It will also provide a clear and simple transport governance structure, solving many of the current problems of fragmented and drawn out decision-making processes and overlapping responsibilities.

Roles and responsibilities between national and regional levels of transport administration will also be simpler and clearer - a crucial factor in making faster and better transport decisions that have far ranging implications for the country's economy beyond Auckland's boundaries.

We appreciate that key stakeholders hold a range of views around the value of a Regional Transport Authority.  These issues are complex and warrant further consideration before final decisions are made on Auckland transport governance.

The government has agreed that final decisions on Auckland transport governance will be made in the course of developing the third bill.

The first piece of legislation, which came into force on 25th May, established the Auckland Transition Agency and its governing body.  This enables the current form of local government to transition to the proposed Auckland Council by 1 November 2010 - after the local body elections.

The second piece of legislation, the Local Government (Auckland Council) Bill, covers the establishment of the council and 20-30 local boards, empowers the Local Government Commission to determine ward boundaries for the Auckland Council and local boards, and provides for the integration of Auckland's water infrastructure. 

That bill is before a special select committee - the Auckland Governance Legislation Committee.  Submissions on that bill  closed today, and hearings will begin in Auckland very soon.
A third bill will be introduced later this year to provide for the ongoing governance structure, functions, roles and powers of the council and local boards, and detailed legislative framework for governance arrangements.

I am very pleased with the calibre of the board of the Auckland Transition Agency, headed by Mark Ford, from Watercare.  They have a huge challenge ahead of them, but also a very exciting one. 

The reform of Auckland is part of a major overhaul of local government that I am currently focussed on.

The situation we are facing in local government is stark.  Local government operating expenditure has risen faster than inflation, whatever inflation measure you use. 
And the sector itself has predicted that this trend will continue. 

The question must be asked - when will this end?  We need to act now. 

Councils must improve the efficiency of service delivery, and consider the quality of all their expenditure.

Central government has had to do this, and local authorities can no longer avoid the issue.

We are taking a number of actions to try to achieve a more streamlined, efficient, and responsive local government sector.

Cabinet has approved a review of the Local Government Act 2002, aimed at ensuring that ratepayers and citizens have better tools for controlling council costs, rates and activities. 

It also seeks to improve transparency, accountability, and financial management.

The review is not about prohibiting local government from doing things. 

It is about enabling the sector, but with the greater involvement of ratepayers and citizens in authorising what is done on their behalf.

The review of the Act is about reducing the amount of central government direction to local government.  It is about giving ratepayers greater say.

The review will be guided by three principles:

- local government should operate within a defined fiscal envelope
- councils should focus on core activities, and
- council decision-making should be clear, transparent and accountable.

To encourage better fiscal management and a focus on core activities, councils need to take a strategic approach to budgeting by first establishing limits on expenditure, rates, and debt, and setting priorities within those limits.

The purpose of local government is to enable democratic local decision-making and action by, and on behalf of, communities. 

The sector needs to consider shifting the emphasis of decision-making from ‘on behalf of' citizens and ratepayers to ‘by' citizens and ratepayers.
 
As part of the review of the Act, we will be considering the circumstances in which referenda and polls can be used as  decision-making tools.
 
You will no doubt be aware of the recent publicity on the question of core council services. 
There is currently no formal definition of local authority core services.  Officials are working on defining what are, and are not, core services.

I'm not suggesting that the Government stop councils from undertaking activities.  What I am proposing is that councils focus on core services and seek a citizen mandate for activities that are clearly not core services.

Let me be clear that I am not proposing that the Government prohibit councils from undertaking activities. 

What I am proposing is that councils focus on core services and seek a citizen mandate for the more extreme and risky activities that some councils have been getting into. 

If the citizens approve it, that's fine - it's their money that is being put at risk. 

So you can see that like the Minister of Transport, I've got plenty to keep me busy.

Thank you again for the opportunity to join you here tonight - I'm very happy to take your questions or hear your thoughts.