Address to the University Club of Dunedin

President John Burton, Members of the University Club, ladies and gentlemen - thank you for inviting me to join you here this afternoon.

Today I am going to talk to you about one of the largest restructurings, public or private, ever attempted in Australasia. I am going to talk to you about the amalgamation of eight sizeable councils to create one single organisation – the new Auckland Council. 

Increasingly, it is cities that compete, not countries.  Today, when we think about a country – whether it is for business, travel or migration – we often consider and evaluate that country for its significant cities.  If I talk about England, it likely brings London to mind. The United States may bring you to think of New York or Los Angeles.

Likewise, we think not about locating to Australia or New Zealand, but say Sydney versus Auckland or Queenstown versus Taupo.  We think not about doing business in China or New Zealand, but in Shanghai or Auckland.

For a country to prosper, its cities must prosper. We must attract business, investment and people. 

Cities must also offer an attractive lifestyle, not only to attract the skilled international workers we need, but also to ensure talented Kiwis choose to stay here and drive our economy. 

Before the last election, in 2008, I set my sights on becoming the next Minister of Local Government because I wanted to do something that would significantly benefit New Zealand as a whole.  Auckland was that project – its governance was broken and it needed to be fixed.

For more than 50 years, Auckland’s ability to develop and prosper has been stymied by duplicated services, competing leadership, complex and fragmented decision-making processes, factionalism and weak accountability.

Fixing these problems was no easy task. I was fortunate to have the backing of a tremendous team behind the project.  From the outset, I made it clear – we were considering what was best for Auckland and, in turn, what was best for New Zealand. 

At the first meeting with Mayors and Chief Executives my only interest was what was best for Auckland and that they should frame all their complaints and suggestions by first asking what was best for Auckland.  And they did.  We blew away the factionalism and special interests.  I also asked that we show the rest of New Zealand Auckland at its best.  And we did.

Council officers worked hard, for long hours, for Auckland’s future – even though, for many of them, there was no job at the end.  The professionalism shown was extraordinary and they should be proud of what has been achieved.  I certainly am. 

We delivered what was required, and more.  The restructuring was accomplished with a minimum of fuss – on time, and under budget.

We have led the way in creating a legislative framework that, only eight months on, is already delivering integrated decision-making and greater community involvement.

In delivering a more efficient organisational structure, Auckland ratepayers have benefited through lower rates.  The new Auckland Council recently announced a rates increase of just 3.9 per cent.  That is below inflation.

I will put that into context.  Under the old eight-council structure, rates across Auckland were to rise by an average 9.3 per cent with one council projecting a rise of up to 11.9 per cent.  The reduction in rates equates to an $84 million saving for Auckland ratepayers.

On top of that, the price of reticulated drinking water across metropolitan Auckland has dropped by an average of 20 per cent.  That is efficiency.

The Auckland Transition Agency estimated that on 1 November 2010, as a result of the changes, there would be a 13 per cent reduction in personnel between the previous councils and council structures and the new governance arrangements.  This equates to an annualised salary saving of $66.5 million.  By 1 July next year, the reduction is estimated to rise to a saving of $91 million. 

The benefits don’t stop there.  The reforms haven’t just saved the average ratepayer money.  We all know how frustrating bureaucratic red-tape and endless, nonsensical paperwork can be.  The reforms have resulted in less stress and wasted time for those dealing with the Council – less paperwork and a common sense approach to things.  

The new structure has a strong emphasis on customer service.  Training and induction processes during the transition concentrated on ensuring staff were well prepared to meet customer needs.  There are now three categories of service centres – full, local and neighbourhood – with locations in every local board area – from Warkworth to Pukekohe; from Huapai to Great Barrier.

Under the old councils there were 60 different categories of dog licence.  This has been halved and fees have been standardised at the lowest level.

More than 850 resource consent forms have been streamlined to around 120 across Auckland, and are now available online. 

As Auckland is now a unitary authority, dealing with both regional and district matters, ratepayers will only have one rates bill to deal with.

The amalgamation of Auckland libraries has created the largest library group in Australasia, giving Aucklanders access to 3.5 million items.  Aucklanders can now use their library cards at any of the 55 libraries and four mobile libraries in the region.

Transport is a major challenge for Auckland and it is the most significant area of shared expenditure between the Government and Auckland Council.  There is now just one entity, the council-controlled organisation Auckland Transport, instead of the previous nine local transport entities.  We have, for the first time, a coherent, region-wide approach to solving Auckland’s transport issues.

The savings and improvements are significant and they are great to have.  But this was not the purpose of the reform.  The purpose was to substantially improve the governance of our largest city.  

Previously, eight long-term plans had to be prepared; five water and wastewater companies operated; and seven district plans existed.  Now, under a unified Auckland governance structure, we have just one of each.

We had over eight competing and confused councils.  We now have one Mayor and one council – with the mandate and the legislative ability to deliver one vision for Auckland.

The incessant buck-passing that bedevilled Auckland for decades has gone.  The people and the communities of Auckland now have one Mayor and one council to hold to democratic account.

Auckland now has a strengthened and integrated governance structure.  When Auckland needs to act as one, it will be able to.  Where the impact of a decision extends beyond a single local board area, or the benefits are regional, decisions will be made by the Auckland Council’s central governing body.

The governance framework provides that there are two decision-making groups in the new Council – the governing body, made up of the mayor and councillors, and local boards.  The local boards have specific decision-making responsibilities in their own right as well as responsibilities that may be delegated to them by the governing body.

The Mayor leads the development of Council plans, policies and budgets, and ensures there is effective engagement between the Auckland Council and the people of Auckland. 

Local boards make decisions on local issues, activities and facilities and work with the governing body to ensure that community interests are well represented in regional decision making.  The local boards are a completely new entity for local government in New Zealand and have far more extensive powers than the former community boards.

Local boards are responsible for promoting the well-being of their communities.  They can do this by considering the content of strategies, policies, plans and by-laws that impact on their communities.  The new Council must listen to their preferences on funding and how that is allocated in local board areas.

These arrangements have resulted in a more effective governance system for Auckland as one Council identifies and responds to the needs of the greater Auckland region, whilst local boards respond to the specific needs of their respective communities. 

Looking forward, the Government’s engagement with the Auckland Council is focused on the development of the Council’s first Spatial Plan.  A spatial plan is an internationally recognised planning tool – but it is new to New Zealand. 

The Spatial Plan will set out a long term strategic vision for the Auckland region, including a preferred urban form and sequencing of infrastructure provision for growth.  It provides something of a ‘bird’s-eye view’, if you like, of how Auckland will develop over the next 30 years.

The Plan will contribute to improved outcomes for Auckland, and to the Government’s national economic objectives.  It is critical to our country’s success.

I encourage those of you with an interest in Auckland to put in a submission during the public consultation phase, when this occurs.

Though the Auckland governance reforms were the Government’s specific response to a unique set of circumstances, aspects of the Auckland reforms may have implications for local and central government.

Aucklandmay be the first step of many in dealing with the considerable challenges faced by local government. We need to identify these challenges and seek out solutions to resolve them.

For this reason, I have started the ‘Smarter Government, Stronger Communities’ project which will consider councils’ structures, functions, funding and relationship with central government.  I think we can improve both central and local government – this project is designed to identify where and how we can do better.

The Department of Internal Affairs is focussed on scoping the review this year, with broader stakeholder engagement to take place later in the process.  The information we receive will help us identify the key issues and challenges for local government and further focus the review.

I have no preconceptions about the outcomes of the project. There are big issues that need proper consideration.  We are not going to rush it.  Decisions will not be made until well into 2014.

Looking forward, I am hugely excited for the future of Auckland.  With the new governance structure in place, we are on our way to turning around its fortunes, making it a united, prosperous and dynamic region that all New Zealanders can be proud of.

It is my expectation that Auckland will grow in stature and efficiency to become a truly international city. It lays a solid democratic foundation which will boost our regional growth and prosperity for generations to come.

Thank you. I am happy to take any questions that you may have.

ENDS