Speech to LGNZ conference

Kia ora koutou katoa and thank you for the invitation to speak to you all today.

I would like to acknowledge Local Government New Zealand President Stuart Crosby, and Chief Executive Susan Freeman-Greene, and our host, Mayor Grant Smith of Palmerston North City Council.

I also acknowledge all elected members and chief executives that will attend this important conference over the next couple of days.

State of play

I want to begin with the current state of play for New Zealand, and how that extends to shared challenges with local leadership.  But I cannot do that without first an acknowledgement of the huge body of work that you our 67 local governments have under way, and the circumstances under which you serve your communities.

The past three years have been tough. COVID has shaken our people and now it is testing our economy. And while we are well placed to take these challenges on, we do so on behalf of communities who are fatigued and with teams who have given tirelessly of themselves for more than two years now. And that includes you.

It’s also getting tougher to be in public facing roles than it was even a few years ago, both at a personal level, but also because of the magnitude of the challenges. It’s a heavy load you carry and I know it feels like it is getting heavier. 

Infrastructure, climate, the future shape of local government itself. Increasing weather events, the ongoing pandemic, community wellbeing. But for what it’s worth, you are not alone. In central government we feel that weight too, I certainly do. And I very much see it as my job to ensure that you are supported, and that when it’s a joint challenge, that you have a partner in central government. After all, a problem shared is a problem halved – and goodness knows we could do with a bit of problem subtraction.

But I also come here today with the strong belief that while things are tough right now, and will be for a time, there’s also cause for hope and optimism.

I’ve recently completed a series of trade missions where I took with me the key message that New Zealand is open for business, as our borders fully reopen in less than two weeks’ time, and as we look to seize the opportunities of social and economic recovery created by strong, collective, pandemic management, and a reopening and reconnecting plan that’s been under way since February this year.

But what gave this message its strength, was that it builds upon the core of what already makes New Zealand in demand in the eyes of others. Our unrelenting commitment to putting people first. A belief in the benefits of working together to make life better for everyone, and not just for current generations, but also for those yet to come.

It’s a view I know many of us in this room share.

And in a grim insular time for the world right now, with a war in Ukraine, a global oil crisis, pandemic supply chain and inflationary challenges, and a strong dose of pessimism the world over, it’s clear to me that a natural inclination to work together, and to be optimistic about our opportunities, is an advantage, in that it sets us apart.

Abroad this has meant we’ve been able to deliver as a Government a series of high quality free trade agreements, collaborations on big issues the world is facing like climate change and mis and disinformation.

I have done much of this alongside Minister Nanaia Mahuta, who is a champion for undertaking important, long lasting, intergenerational work, getting on with what’s important and planning for the next 100 years, not just tomorrow.

And for me, the way in which we work with the world, is the way in which we must work at home too. We face challenges together. We do what’s right, not necessarily what’s easy.

For central and local government, that has meant working together through more than two years of a global pandemic. That began with keeping people safe, and now it focuses on building back better, including the very recent example of helping over 2,500 youth and COVID displaced people back into work through the successful Mayors Taskforce for Jobs and MSD Industry Partnership.

We’ve recently announced a $14 million investment to keep that programme running, because it works. I thank you for your design and championing of such a successful programme, and your advocacy for it. In fact you recently shared with me how important it was to you that this programme continue in full force and we heard that.

And while this is a story of cooperation between local and central government, it’s also a story of one school leaver who got a carpentry apprenticeship who likely otherwise wouldn’t have. It’s a story of eight people in Stratford finding meaningful work in the aquatics sector that was struggling to fill roles. It means an extra electrician in the pipeline for a Stratford firm. Yes the Mayor of Stratford is quite good at promoting the programme. 

It’s a reflection of what’s at the heart of our work – we are a government focused on people. And you are 67 local governments focused on the wellbeing of your communities, of your people, in your place.

And so, I hope this will be the foundation upon which many important conversations will take place over the next few days.

Lots on the plate

And so now, as we look to the future, I find myself here today saying exactly what I did last year - there is a lot on our plates.

Underlying that simple fact is this: The substantial reforms that are in progress across a wide range of areas have needed attention for a long time. They are not quick fixes. This includes Three Waters, Resource Management reform, and changes to the way we plan our cities to support more housing. There are also important reforms in waste minimisation and management, and the Government continues to put in place the institutions required to reduce and manage the risks from climate change, with major steps taken just this year in the release of our first Emissions Reduction Plan.

And you are engaging with all of that while also of course, continuing to deliver on your existing responsibilities and do your part to meet the ongoing needs of your communities, including responding to local emergencies of which there have been many of late, and on each occasion, the local community and emergency management response has been exceptional.

Altogether this is a tough ask of local government, I know. I understand that together the speed and scale of change on so many fronts plus the demands of service delivery in the here and now make this a uniquely challenging time.

In acknowledgement of this, we recently appointed a new Associate Minister of Local Government, Kieran McAnulty, who has a role in engagement with the rural and provincial sector in particular, and who has been undertaking something of a tour across all 55 rural and provincial councils over the past few weeks, hoping to complete this engagement come October. I think he’s about halfway.

Minister McAnulty has told me much about his engagements over the past few weeks, the need for more information, for more support, especially as councils begin to incur costs on transition activities for Three Waters – such as demands on staff time and engaging specialist expertise, which is particularly challenging for smaller and rural councils who are always spread more thinly.

And I know that yesterday he was able to announce $44 million in immediate funding to help with this early transition work. Practically speaking, this will help in the early work to transfer workforce, contracts, assets and liabilities into the four new Water Services entities.

We know there is more to do too. As the Minister said yesterday, he has more councils to meet with and will be asking them how central Government can support them and how to target future transition support.  

But Kieran has also told me something I know to be true too: that on many of the big challenges we’re facing in planning our cities, towns and communities that the status quo is not an option for anyone – because the status quo would condemn whole communities to unaffordable rate burdens, particularly on rural and provincial ratepayers. And so there’s much more to be done.

Three Waters reforms are moving forward

I know that the Three Water reforms are a key focus over the next few days, as they have been since the policy process began. There has been a lot of commentary on this topic that has at times overshadowed some of the very basic and crucial reasons for change.

The sad reality for all of us is that without change the current system couldn’t afford to resolve what is a looming $185bn problem.  We know going forward we face growing populations alongside the rising threat of climate change, and the only viable option within the status quo represents an unaffordable burden on rate payers – for some, what could be as high as an additional $9000 a year.  

And while we could spend a lot of time on how we got here, I think it’s fair to say that the general enthusiasm for investment in water infrastructure is only matched by the enthusiasm for major water reform. And that may have contributed to how we, both central and local government, have found ourselves in the unenviable position of carrying the burden of resolving this decades old problem. But it has to be done. And by taking the leap, there are opportunities to be found.

And so today I would hope the progress that is starting to be made, will move us beyond the old debate, into the how, and the what’s next.

And we are making progress.

First, all parties have agreed that there is a need for substantial change. It is heartening to see many councils lift investments in water networks in their Long-term Plans. Taumata Arowai, the new drinking water regulator, has been up and running since November last year.

I know that at the heart of councils’ concerns has been the issue of ownership and voice, and in April, the Government confirmed local council ownership and strengthened local voice by accepting the vast majority of the Three Waters Working Group recommendations on representation, governance and accountability.

In addition, the $700 million stimulus funding from Budget 2020 has resulted in the upgrade of:

  • 266km of drinking water pipes
  • 133km of wastewater pipes
  • 79 drinking water treatment plants
  • 78 wastewater treatment plants

And the $2.5 billion that followed has been unlocked with 47 councils having now applied for the Better-Off funding.

Legislation is underway, with the introduction of the Water Services Entities Bill in June to establish the four new publicly owned water services entities, and The Water Services drinking standards regulations will come into effect in November.

I hope that you have taken the opportunity to submit to the Select Committee considering the first bill. And that you will do the same when the legislation to establish the economic regulator and to enable the transition to the new entities is before the House, early next year.

There are opportunities for us to continue to improve and refine the details around these reforms, and we genuinely want to do that.

We have benefitted from the direct involvement of many local government representatives, including Local Government New Zealand, in improving the proposals for change. Direct council shareholdings in the new entities, direct appointments from the Regional Representative Groups to the boards, and more influence for those Groups over the new entities were all changes introduced in response to the requests of local government representatives.

We won’t necessarily agree on everything though. For instance, we’re firmly of the view that the issues with the safety, quality, cost and sustainability of our water services systems are inter-linked and that a small number of entities that are council-owned but financially separate can unlock the funding and investment and focus required to improve Three Waters over the long-term.

But we’re also clear that central government should not have an ownership or funding role for the entities. These entities can achieve the scale and specialisation required to operate on their own.

And there is much we need them to do. Now is the time to take this opportunity to improve these persistent, long-standing issues where they exist, least we continue to see the domino effect on housing and regional economic growth.

The Future for Local Government is up to you

But of course there’s much more to be discussed across the next few days here as well.

I am looking forward to hearing more about where the Future for Local Government Review panel is getting to. As you know, we set up the Review at the specific request of the sector to provide an opportunity for local government to think about its role 30 years in the future and to look at whether the current structures, powers, processes and funding systems will be fit for purpose over that timeframe.

The draft report will be out in September and the final report now in June 2023. The Minister has recently extended the timeline for the final report, at the request of the sector. I hear that the Review has done as it was asked, and has thought deeply and consulted widely on what local government should do, how it should be structured and how it should operate.

I just want to be clear that this is the sector’s review.

It will not be the policy of any government I lead to embark on another substantial reform of local government or governance unless it is sought and unless and there is broad consensus amongst local government about the need for and the direction of change. Obviously any substantial changes to the framework in which local government works would benefit from cross-party central government support to ensure their stability.

I see an important role for local government in providing a way to connect different agencies and arms of government and services at place. Local government has a unique integrating role. There is more here we can learn, and with your help, improve upon.

Electoral reform

I want to thank you too for the changes you proposed to electoral law, to keep those serving our communities safer.

It is abhorrent to have seen examples over the past year of those representing their communities in public duty facing violence.

You told us that the local electoral environment was becoming dangerous, and that one of the barriers to candidates standing was the requirement to publish a physical address on election advertising, as that could put candidates at risk of opportunistic abuse.

We heard you, and we changed the law. The current environment is one in which it is hard to be a politician – local government or central – but it is also one where encouraging and supporting people to take up the jobs is vital. We are here to keep working together to support you, and I’m keen to hear ideas on how we can make the role of public service, which by its very nature makes you public and accessible, as safe as possible.

I know this is a hard one to balance. We want to be contactable. I will never forget the story Jim Bolt once shared with me. He is one of those mayors that very openly shares his personal contact details. One Friday night he returned home, having promised his wife that he would take her dinner. No sooner had he walked in the door than his phone rang. The person identified themselves as a tourist visiting Queenstown from the North Island. They were calling to inform the mayor, that there was no chardonnay at their hotel bar – a shocking detail they believed required escalation to the mayor.

Jim is so good humoured, I know he took it in his stride. And all of you on issues both weighty, and less so, are there and available constantly. But I know in recent times that has become more challenging. I want us to keep working together on how we can ensure these public service roles don’t take so much out of our councillors and mayors that we lose you in short order.

I also want to acknowledge another example of strong support for your sector in the pursuit of diversity around the council table. Before this current Parliament, 24 councils had attempted to establish Māori wards under the Local Electoral Act 2001. Only two had been successful.

You asked the Government to change the law to allow local council decisions to establish local wards to stand, without being subject to a poll.  We heard you, and we changed the law. This year, 35 councils will have Māori wards. Two, to 35.

To conclude

I know there will be many discussions across the next few days, and that Minister Mahuta will be discussing the many different elements of work programmes in greater detail.

And so I’ll end as I begun, the state of play for New Zealand as for the world is a challenging one, and I have no doubt that those challenges can feel even more amplified at local level.

I want you to know we understand that the scale of change is large and the pace fast, but not insurmountable.

That the work will take time, but not forever.

That some voices may call for what’s easy, but not necessarily for what’s right.

But most of all, I want you to know, that we’re grateful for the duty of service you pay to your communities. Thank you for what you do, and may our work together continues to be based on what drives us all, our communities.