Address to Local Government New Zealand 2011 Annual Conference

President of LGNZ Lawrence Yule, Chief Executive Eugene Bowen, other members of the LGNZ National Council, ladies and gentlemen – thank you for the opportunity to speak to you this afternoon.  I would like to thank Local Government New Zealand for organising this event and bringing us all together. 

This looks to be my last Local Government New Zealand National Conference.  There’s been regime change in my own Party and my time in politics appears over.

I set my goal to be Minister of Local Government well before the last election.  I figured Auckland Governance was broken. And that it would be a good job for me to fix it.

I also realised that local government has a big impact on people's lives and our nation’s prosperity.  It seemed to me too that, for years, central government hadn’t taken local government seriously.  I believed I could do something very positive for New Zealand in the role.

It has been a tremendous privilege being Minister of Local Government.  I have especially enjoyed getting to know and working closely with Lawrence and Eugene.  They do a tremendous job on your behalf and I have been very fortunate as Minister to have had their help, their friendship and their counsel.

I would like to thank all of you too for making me welcome in your districts and explaining for me your issues and challenges.  You made me aware of the diversity that is local government and just how far away your communities are from Wellington and the bureaucratic BS that too often can consume us.

I had a great weekend with Mayor John Forbes and his council. Walking around with him, I realised that everyone in Opotiki knows John.  But what’s more, John knows everyone in Opotiki.  That’s the local in local government.  We must never lose that.

John’s council built an aquatic centre.  Not bad for Opotiki.  And it didn't cost the council a cent.  One of John’s councillors has heavy machinery.  He dug a mud slide down a hill and diverted a creek for a great ride at a dollar a pop for local charity.  The kids – and adults – had the best fun – as much as in any $20 million facility I have seen.  There was a great community feel.  And the local charity did well too.

We must never lose sight of the Opotikis, the Kaikouras, and the Buller Districts when thinking about local government.  Too often we do.  They are our heart and soul and local government at its very best.

I did get to fix Auckland. It was a big job.  I sat down at the start with the Mayors and Chief Executives.  I said we were doing this for Auckland.  I explained I would listen to all complaints and to all suggestions.  But there would be just one criterion of consideration: what’s best for Auckland?  I wasn’t interested in what was good for the old council structures, interest groups, or particular careers, or the past.  I wanted what was best for Auckland’s future.

I also issued a challenge: let’s show the rest of New Zealand Auckland at its best. 

And we did. 

Everyone got on board.  We completed the largest restructuring public or private ever attempted in Australasia.  We did so at speed, on time under budget with a minimum of fuss.  Council officers worked hard for long hours for Auckland’s future even though for many of them there was no job at the end.  They worked themselves out of a job.  They did it for Auckland.  The professionalism shown was outstanding and local government should be very proud of their work. I know I am.

Looking ahead, I do not see great mileage in further amalgamation.  For me Auckland was unique. 

We needed a Mayor and a council with the mandate and the power to provide the political leadership and vision that Auckland lacked.  That was never possible under the old fragmented structure.  We now have it.

The reform was never about savings.  It was about good governance for Auckland.  We achieved significant savings but they were hard work and I don’t believe amalgamation guarantees lower costs.  We were lucky with Mark Ford and his team at the Auckland Transition Authority who kept a very clear vision and a determined focus.

Amalgamation is risky.  It’s too easy to end up with councils even more remote and more bureaucratic – losing the local in local decision making.

So looking ahead I see benefits in shared services and councils working together on both projects and plans for the wider regions of which their communities are a part.  I believe in that way we can enjoy the benefits of amalgamation while keeping the local in local government and avoiding the risks of amalgamation.

It may well be that other cities will copy Auckland in becoming a unitary authority.  There is logic to that.  For example, Christchurch may be best served with a unitary authority with the Regional Council ECan concentrating on the rest of the region.  I believe we might improve both the governance of our cities and our natural resources with such a structure.

But let’s see how Auckland goes.  We have an opportunity now to learn something about what governance structures may or may not best serve our own communities.

Looking forward we must in the future align better local and central government decision making.  That’s the key to unlocking our true potential.  It seems wrong to me that central government requires local government to make 10 and 30 year plans but then itself does not come to the party.  Yet the dominant player in those plans is central government itself.

We have a unique process now for Auckland as it prepares the first spatial plan in New Zealand.  The Government has provided the new Council with background papers on its views on Auckland’s development, officials have been authorised to work closely with council officers on the plan, and we have a dedicated Cabinet Committee to ensure close collaboration between Ministers, central government agencies and the Auckland Council. 

The project is proceeding better than I could ever have hoped thanks to the Mayor, his council and council officers.  Central government agencies are taking full advantage of the opportunity of at long last being able to work closely with the political leadership of Auckland in their own areas of responsibility.

We now have a unified Auckland leadership but also we have an Auckland working closely with officials and Ministers on its future development.  That’s a huge improvement over where we were.

I believe the process may offer benefits for other regions in New Zealand.  I can foresee councils of a region working together in developing their own joint plans. And likewise having the opportunity to align central and local government decision making for their region.  I believe such alignment is critical if we are to unlock our full potential.

As Minister, I have always been keen to get costs down for ratepayers and to provide democratically elected councils greater autonomy from Wellington.  We are not rich enough to be able to waste precious resources on unnecessary process and needless bureaucracy.  The result was the changes to the Local Government Act.  These were positive.  But to me they still don’t go far enough.

I still consider the Act too prescriptive.  Mayors and councillors are elected by their communities to make decisions for their community.  The Local Government Act needs to enable them to do that.  Its purpose should be to ensure that decision making is transparent for communities to hold Mayors and councillors to account.  But it shouldn’t disempower them by setting them on railway tracks of process where it’s the process that rules, not the people themselves.  That’s wrong.  We don’t do that for central government.  We shouldn’t do that for local government.

But the challenge of the Local Government Act being too prescriptive pales in comparison to the tidal wave of legislation passed by government and the multitude of policies pursued which further burdens local government operations.  Time and time again principles of good governance are sacrificed for the particular policy objectives being pursued by Ministers and central government agencies

Let me give you a controversial example. 

The Government naturally and rightly wants to settle historical Treaty grievances.  In these cash-strapped times it’s getting harder. And the claims are getting tougher.

So now local governance is up for grabs as part of the settlement process.  Treaty negotiators have been discussing co-governance and seats at the council table in lieu of cash and property. Their purpose is not good local government but treaty settlements.

Of course, if the objective is a Treaty Settlement, then it’s unlikely good local governance will be the result.  These are two different objectives.  The drive for a Treaty settlement is quite different to a drive for sound local governance.

The same mixing of objectives occurs in every portfolio and every policy objective of central government.  The same problem arises for Aquaculture, Building Regulation, Transport policy, and so on.

Lawrence, Eugene and I found ourselves always on the wrong side of the Treaty Settlement process, not because we were against the settlements as such but because we were for good local governance.

And, of course, in the past local government and local communities weren’t involved in the process until the deal was done because rightly Treaty Settlements are the responsibility of central government, not local government.

We found it impossible to debate every proposed settlement on the basis of the principles of good governance. So we engaged cabinet in a generic debate about what principles for local government should guide the Treaty Settlement process.  That was a whole lot easier.  Having established the principles at Cabinet, we now have a good basis for a proper discussion of Treaty Settlements as they affect local government.

To me the big challenge for local government now and for the future is establishing its proper place in the constitution of New Zealand.  To me it’s very clear.  Local government is our second tier of government, properly constituted and democratically elected.  But successive central governments have not treated it as such.

It’s now become a mish-mash between central and local government of confused roles, overlapping decision-making, blurred accountability, and too often dual funding.

We need to establish some clear principles to guide local government and central government decision making.

That’s why the ‘Smarter Government, Stronger Communities’ project is so important.  It picks up on the many concerns and issues you have raised with me as I have visited and met with you.  And it provides a mechanism and a process for your issues and challenges to be properly considered, debated, evaluated and acted upon.

It’s a big project for local government and for the country.  I intend getting enough momentum behind it in my remaining months to propel it through the next three years to a conclusion.

I don’t have any preconceptions about what the project will conclude.  But I do have one thought to share.

It’s hard in our parliamentary structure to provide proper constitutional protection for local government.  Parliament is after all sovereign.

But I do believe that the Government should sign up to a statement of principle to govern its relationship with local government after each and every election.  And it should be required to adhere to these principles unless it has good reason not to.  Because otherwise, to be frank, councils will continue getting pushed around every which way.  The sort of principles I would like to see recognised are:

1. That there will be a clear assessment of what level of government is most competent to make a particular decision. 

2. When central government makes decisions that constrain local decision-making, it will only do so in the national interest.

3. The cost of any central government intervention in local government should be fully costed.

4. If an intervention is considered in the national interest, it should be recognised when developing funding options.

I believe that central government should keep these principles in mind at all times before it makes any decisions relating to local government.

Once we get the principles established decision making becomes a whole lot easier.  What we have achieved for the Treaty Settlement process by way of good principle we should likewise do for all policy.

Once again thank you for inviting me to speak. 

Thank you for your great support and hospitality you have shown me.  It has been a tremendous privilege to be Minister of Local Government in this great country of ours.

And let me assure you I am continuing to make every day count. There's much to be done before November, and I am working to achieve a good momentum to ensure the work we have underway continues and is completed in the years ahead.

Thank you.