Speech to LGNZ Annual ConferenceLocal Government
Good morning everyone.
It is my pleasure to be here with you in Rotorua.
Lawrence, thank you for your kind welcome, and also your leadership and drive to deliver better local government across New Zealand.
Mayor Chadwick, it’s a pleasure to be back in your city, thank you for being such a gracious host.
I want to acknowledge the hardworking ‘local government team’, Associate Minister Louise Upston and Jacqui Dean, Parliamentary Private Secretary for Local Government.
I’d also like to acknowledge Basil Morrison and Anne Carter who have been with the Local Government Commission for four years.
Anne, thank you so much, for your dedication, for what you’ve put into the role, and for your many years of service and professionalism.
But I want to focus on Basil – how can one not.
He has literally had decades in local government, in many different roles with his latest as Commissioner.
I just want to say a sincere thank you.
Thank you for what you’ve done for the citizens of New Zealand over the last few years in your role with the Commission.
I really appreciate it, it is acknowledged by many.
I know you think you’ve had a hard time occasionally, but change doesn’t come without a few bumps as you know.
So I want to really acknowledge your desire to serve local government and the people of New Zealand.
We appreciate it.
I’m not quite sure where the year has gone, but it doesn’t feel that long ago I was speaking to you all at the conference in Nelson!
A lot happens in a year.
There’s been an election, and as I’m sure you can imagine I’m pretty pleased with the result.
The All Blacks broke their winning streak after drawing against the Wallabies, but they made up for it with a spirited showing in Samoa and a good win against Argentina.
And Lorde continues to be more successful than any of us will ever be at any age, and all before she’s 20.
I’ve got a great new set of portfolios that are all connected and give me a whole lot of different levers to really take better public service delivery to the next level across Government.
Between State Services, Social Housing, Tourism, Finance and Local Government, I am looking across the board at making sure we have the right people in the right place, with the right tools, to deliver the outstanding services the public expect.
I quite deliberately asked the Prime Minister to keep the Local Government portfolio, because at its heart, it is about where New Zealanders live and where they work,
It’s about supporting them to live meaningful and successful lives.
People and Perspective
Fundamentally, ladies and gentlemen, we’re all here to serve the same people.
Your ratepayers are our taxpayers.
I understand you had a good discussion about the remits on Sunday.
The Government will always consider what local government has to say about issues, and work with you on these areas going forward.
If you’re anything like me, you probably go to bed many nights thinking “have I done everything I can today to deliver for the New Zealanders who have elected me to serve their needs?”
It is really important to remember that we are serving New Zealand, and you have a particular local focus.
So, like it or not, we are in this one together!
This means we share citizens, and we also share the issues we’ve got to tackle.
And I think we have to be honest with ourselves: we do of course have challenges.
But equally, we have to keep things in perspective because we also have opportunities.
Try telling Southland, which at 11 per cent has the highest growth rate in the country, that there is only bad news.
Try telling Marlborough, or Waikato, with their 10 per cent growth rates, that our regions are in crisis.
The Bay of Plenty, where Kiwifruit has really taken off again.
Let’s go to the entire South Island, which has an unemployment rate of 3.6 per cent compared to the rest of New Zealand at 5.8 per cent.
I am offended often on your behalf.
As leaders in your towns and cities, to constantly be painted as ‘broken’ is offensive.
Hard working, innovative, driven New Zealanders are at the centre of the growth that we see.
These communities are our heart; they are a significant part of who we are as New Zealanders.
They are not forgotten, for without them we lose the essence of who we are.
Many are growing, and more importantly for sustained long-term growth, we’re seeing a more diverse economy driving these results.
Tourism now directly contributes $8.3 billion or 4 per cent to New Zealand’s GDP, and over half of that is spent outside the major cities.
ICT now makes up close to 2 per cent of GDP.
Horticulture is booming – Kiwifruit is on the comeback, and how proud are we of the wine industry!
Dairy is facing a rough patch, but farmers know during the good times to prepare for the leaner ones, and we are hearing there is confidence the sector is financially well placed to ride it out.
We’re also seeing huge growth in beef and wool, ensuring we’re not solely reliant on dairy in the primary sector.
You know, I spend a lot of time getting around the country talking with people, talking with you, in your communities about how things are going, and it just doesn’t gel with what you see in the news.
Just a couple of weeks ago, I met with a range of businesses operating in South Auckland.
And if you want to talk about an area that has some challenges, then you only need to look there.
Every single one of them said they were hiring and needed more staff.
Think about the small businesses that have sprung up to serve the tourists using the cycle trails throughout regional New Zealand.
The cafes, the accommodation providers, the tour guide operators.
Look at Ruapehu – it’s gone from being a winter destination to having around 11,000 visitors most weekends because of the cycle trail.
This isn’t just a reflection of business confidence.
It means real jobs and more money for hardworking New Zealanders, so they can lead independent lives and get ahead under their own steam.
And it’s something we all have a stake in.
Our work for New Zealand
The Government’s Business Growth Agenda is a significant area of work that is helping drive some of those fantastic growth rates we’re seeing across the country.
Its four key themes targeted at regional New Zealand recognize the importance of our regions’ ability to compete, and is creating the conditions for businesses to innovate, and diversify.
Firstly, we are opening new export markets, and continuing to negotiate Free Trade Agreements to increase market access for exporters.
Secondly, we are building more infrastructure, with improved transport linkages between our main centres and regional economies through the Roads of National Significance Programme.
We’re spending close to $2 billion linking towns and cities to Ultra Fast Broadband and reducing mobile black spots, because this Government believes in giving our people the tools to get ahead in a rapidly changing world.
Thirdly, we’re committed to innovation, because sustained growth benefiting all New Zealanders is only achievable when we adapt to meet the demands of modern and more diverse markets.
Last and perhaps most importantly, we’re investing in New Zealanders, with a real focus on skills to help people embrace new technologies, new opportunities, and let their lives be positively shaped by the pace the world is advancing, instead of being left behind.
You also will have heard about the Rules Reduction Taskforce, which received close to 2,000 submissions from across the country about all those loopy rules and regulations that frustrate people.
What is clear to me is that there are some rules that genuinely need changing, which I am prepared to do.
However, it’s also abundantly obvious that there are a lot of people who have heard myths about what they can and cannot do, and as a result no longer focus on the reality.
A good example is residents of a rest home being led to believe that they need a liquor license if they want to have a few drinks with friends in their room.
Quite frankly, that’s absurd, and it’s also not true, but that doesn’t matter to the people involved – that’s what they’ve been told and that is their reality.
If we can bust the myths and cut through the things that have been interpreted wrongly or just aren’t correct, then both your staff and the public will be free to focus on the rules that are actually important.
I will be writing to you over the upcoming months to go through what has come from submissions, what the law is, how it is being interpreted, and the changes we can introduce to make life easier for people.
Ladies and gentleman, this is just a small list of the huge amount of work this Government has underway to support your towns and cities.
We are relentlessly positive about this country, its people, its potential, and our plan is working for New Zealanders.
But equally, we know there are some challenges out there.
Too many of our small but significant communities aren’t experiencing the levels of growth they need.
And suburbs in our big cities are in the same boat.
It isn’t always a region that is struggling – but there are pockets within all of New Zealand that are not doing as well as they could and should.
You know where they are in your area.
These are the challenges that we as central government will continue to join with local government and our communities to find solutions for.
It is going to take considerable hard work to turn around some places that have layers of complex need due to decades of dysfunction and neglect.
And we are going to continue to do that.
Where we’ve come from
Inevitably, the conversation about how local government plays its part in embracing growth and addressing challenges usually turns to what the structures look like.
I can understand why.
Local government developed in a pretty ad-hoc fashion without any strategic thinking about what it should do.
And here’s the proof –
By 1912 there was one elected representative for every 15 adult men in the country, and we had 3,877 local authorities serving a population of about 1 million people.
Councils owned and operated businesses ranging from abattoirs to zoos, one built a hydroelectric dam, and another owned a fishing fleet.
Well ladies and gentlemen, as any good designer would tell you – form should follow function.
Structures that work
We need to call time on what has been a relentless focus on how many mayors we have, or for bureaucrats to decide what your local democracy should look like.
Now, more than ever, New Zealanders expect you to rededicate yourselves to focusing on the issues that matter to your people, your communities.
This means more jobs, sustained growth, and sensible spending on reliable infrastructure.
I want local government to do more work in this space.
I am concerned that there are regions still having the same conversations that they have been having for the past 30 years.
Yes, there are areas where it makes sense for you to work together, but it has to go beyond close relationships between councils.
It is great so many of you that neighbour each other get along so well and you have decided to share some services, resources, and expertise.
Now it is time to take a mature look at the structure that is needed to lock in change.
I imagine there are some who think that because the Commission has decided to take large reorganisation off the table for greater Wellington and Northland, and because I have clearly stated I will not legislate for large amalgamation that you can all continue as you have.
Well you can’t.
It is not in the best interests of the people of New Zealand.
We simply have to look at growth across a region, and your current structure does not strategically or cohesively support that.
There are so many examples I can give you.
Some councils have a department that supports local tourism, others have one backing major events.
Or business growth in a separate department that doesn’t work with education or understand the broader strategic direction of local infrastructure and the effect that has on business.
An area with the population of 43,000 can have five wastewater treatment plants all run independently.
A national business that is in growth mode that I spoke with recently has a team that spends its time negotiating different rules and regulations of different councils, when all they want to do is create jobs and service a community.
That is ridiculous.
It is time for sustained, locked in change.
So I reiterate, I will not legislate for large amalgamation.
I am as tired as our communities are of having an argument over how many mayors there should be and over whom is bigger than whom and which area will dominate.
Size doesn’t always matter, but long term sustainable growth in the best interests of all New Zealanders should.
Under Basil, the Commission has done great work and taken us far.
We have two new commissioners, Sir Wira Gardiner and Leigh Auton, who start work alongside the wonderful Janie Annear in the next couple of weeks.
They have a big job ahead of them, and I have confidence that they are up for it.
They are going to work alongside you and your communities to ensure that we have the right structure, legally, financially, and with the right accountabilities to ensure sustainable growth in our towns and cities.
This might mean a CCO on water or transport across a region.
It could mean a different business structure or increased responsibilities and accountabilities for Regional Councils.
It could even mean in areas that might put a number of CCOs in place for key growth and infrastructure that there is no longer a need for a Regional Council.
Some councils may even choose to amalgamate.
I fully understand and accept that one solution will not work across all of New Zealand.
That is why the Local Government Commission will be working up various structure options for each region to look at and decide what works best for them, and then where necessary I will legislate to either set a new CCO up across a region – or even to take something away.
I have zero interest in imposing unwanted change on you.
But you know that our regions are not as cohesive as they need to be to support our challenges and our future growth.
So I implore you to do something about it.
Be brave – own the change and both the Commission and I will do everything we can to assist and support you.
But let me be clear – there will be change.
Priorities and Pressures
Ladies and gentlemen, the publics’ expectation of local government is quite clear.
They want better services, they want modern infrastructure, and they want strong leadership.
The Government is aware of the cost pressures many councils face, and the Funding Review document launched this morning shows you are thinking about different mechanisms to manage growth.
Structural change should be one of them.
This is a conversation worth having, but first and foremost local government needs to demonstrate that it can live within its means.
Ratepayers are not willing to pay more for services while they see waste.
Year ending March 2015, local government wages and salaries increased 2.3 per cent, the highest since 2012, and significantly above CPI, the central government, and private sectors.
And the recently released LGNZ Survey identified that local government was rated poorly on trust to make good spending decisions, value for rate dollars spent, and managing finances.
I expect you to look closely at your costs and have free and frank conversations about what is driving your expenditure and whether that discretionary spend is assisting your council to achieve its strategic goals.
This is exactly what the Government has been doing, with our Better Public Service targets driving a more integrated delivery of services in a way that gets results and saves taxpayers’ money.
Our recent discussions at the Central-Local Government Forum produced a strong set of shared priorities that will underpin this work over the next few years.
I’m sure you’ve had a lot of time to reflect on them over the last couple of days, but I want to take a moment to repeat them.
- Creating strong regional economies.
- Resilient local infrastructure.
- Ensuring strong resilient communities across New Zealand.
Each are focused enough to stand on their own, but together, they’re a bold statement of our collective commitment to seeing all corners of the country thrive.
To sum up, I want to go back to something I said at the start.
We are all here to serve the same people.
New Zealand is only as strong as its 16 regions (and the Chatham Islands!), so when your town or city does well, everyone benefits.
This Government is working hard to deliver for taxpayers, and I know how hard you are working for your ratepayers.
Think strategically, be innovative, remain focused on the issues that matter and your communities will reward you for it.
But most of all – be brave.