Speech to the Local Government New Zealand Conference

Local Government

INTRODUCTION

Good morning, and thank you.

Before we begin, I want to express my appreciation to LGNZ for the opportunity to speak today. Since taking on my role as Minister, I’ve met with many of you—mayors, councillors, and community board members from across the country. It’s valuable to have us gathered here to discuss the significant challenges facing New Zealand.

Whether it’s water infrastructure, roading, or providing affordable housing, New Zealand faces substantial challenges. Both central and local governments have the privilege and responsibility to address these issues head-on.

Let me be clear: New Zealanders have had enough of glossy documents, phantom projects, and non-delivery. Kiwis want tangible outcomes—results they can see, feel, and trust to be cost-effective, not wasteful.

Yesterday, the Prime Minister outlined key initiatives to ensure greater transparency, accountability, and cost-effectiveness in how councils spend money. 
 

MORE ABOUT OUR PLAN

The efficiency work programme is part of a comprehensive plan to get local government back on track. You can view the full plan on the Beehive website. However, our approach isn't limited to what was announced last night. If you or your fellow elected members have ideas that can help reduce rates and improve local governance, please reach out to me or my DIA officials—we're keen to hear from you.

I'm also open to exploring options for mayors to have independent staff advice, separate from their Chief Executives and officers. Mayors are elected to represent their communities, but sometimes it seems that officers and Chief Executives may resist democratic oversight. I'm considering whether mayors having their own staff, directly accountable to them, could help navigate the civic service bureaucracy and ensure their communities' voices are heard. Let me know if this is an area where I should seek further advice.


WE ARE DOING THE SAME

These expectations of greater transparency, accountability, and cost-effectiveness in how councils spend money are not just for local government; they apply equally to central government agencies.

We’ve already identified $24 billion in savings and cancelled wasteful projects like Auckland Light Rail and Let’s Get Wellington Moving, which were more about flashy presentations than delivering real transport solutions. Even on a smaller scale, we’re stopping wasteful spending, such as on unnecessary speed bumps, while potholes remain unfixed.

We’re refocusing government departments on frontline service delivery—because that’s why we’re in politics: to serve our communities and deliver real results for taxpayers and ratepayers.

New Zealanders are also grappling with a cost-of-living crisis. While there are encouraging signs—like inflation dropping faster than expected and interest rates beginning to decrease—the public’s tolerance for wasted spending is very low.

Kiwis expect local government to focus on the basics—picking up the rubbish, fixing the pipes, and filling potholes. They elected us because they want central government to concentrate on the essentials, not the extravagances. And we’ve made significant progress.


TRANSPORT

In Transport, we’ve:

 

  • Delivered a 50% increase in funding for critical local road maintenance, including pothole prevention. We’ve ring-fenced this funding for pavement rehabilitation, road resealing, and drainage maintenance to ensure it’s used where it’s needed most. No more siphoning off funds for unnecessary cycleways or speed bumps.
     
  • Implemented benchmarking for all road-controlling authorities, including NZTA, to ensure value for money. As mayors and councillors, you deserve confidence that every dollar you manage is spent wisely.
     
  • Increased funding for public transport services by 40%, ensuring reliability across New Zealand. We’re not wasting time on endless business cases for light rail—commuters need reliable services now.
     
  • Developed a long-term infrastructure pipeline, focusing on roads and public transport, to spur economic growth, reduce travel times, and unlock land for housing. New Zealand needs this pipeline to boost investment confidence, and we are delivering.
     

There’s no room for wasteful spending on nice-to-haves in transport—whether through NZTA or other authorities. The era of magic money trees in Wellington is over. We’re serious about focusing on the basics, and that’s what this Government is committed to delivering.

 

LOCAL WATER DONE WELL

We’ve also inherited significant challenges in water infrastructure.

New Zealand faces an infrastructure deficit in water. The debate isn’t about the size of the deficit; it’s about what we do to fix it.

Our infrastructure planning, investment, construction, and maintenance systems are inefficient and broken, with water being the prime example. Kiwis are tired of dodging water leaks on our roads and footpaths and facing massive water rate hikes with little to show for it.

The previous government’s convoluted, mega-bureaucratic solution cost $1.25 billion and failed to deliver for local communities, stripping ownership and control of these assets from local councils. It wasn’t good enough.

I want to particularly thank those mayors who have stood by their communities in opposing the previous government's co-governed Three Waters reforms. We have seen your commitment to your communities, and that's why we have delivered on our promise to repeal these policies.

Last year, we committed to tackling New Zealand’s water problems directly. We made bold promises to restore local control over water assets, improve water service standards, and create a credible plan for financing water infrastructure upgrades.

Earlier this month, I announced the third and final step of our Local Water Done Well plan. Some doubted it could be done—yet in just nine months, we’ve delivered a solution that didn’t require hundreds of consultants.

Local Water Done Well delivers critical financial outcomes for local government:

 

  1. Partnering with the Local Government Funding Agency allows councils to set up CCOs and secure financing through the LGFA. 
  2. Financing can be up to 500% of the CCO’s revenues.
  3. The LGFA’s AAA credit rating provides lower costs for New Zealanders than Labour’s co-governed Three Waters ever could.
  4. Councils can separate water debt into the CCO, freeing up debt headroom.
  5. This headroom offers councils choices: reduce rates, reduce water charges, increase investment, or spread infrastructure costs more efficiently.

 

This point is crucial: councils can provide ratepayer relief by quickly setting up new water entities, spreading infrastructure costs more effectively, and reducing costs for consumers and ratepayers today.

Let me reiterate: the LGFA provides the lowest-cost financing to local government. While the opposition might fixate on costs, their mega-entities couldn’t borrow through the LGFA and would have faced significantly higher interest rates.

We’ve made swift policy decisions, established a legislative framework for setting up CCOs, partnered with the LGFA for sustainable, low-cost financing, and relieved some of the regulatory burdens from the previous government’s regime.

Now it’s up to local government to show leadership in your communities. Work with your neighbours to find the best solutions for your region. DIA officials and the Water Services Regulator are ready to support you in this critical work.

 

REGIONAL DEALS

But infrastructure challenges go far beyond leaky pipes. We must do a better job maintaining infrastructure, funding both upfront costs and ongoing maintenance. We need a credible pipeline of infrastructure projects to attract the capital and talent necessary to build. And we must find new ways to fund and finance infrastructure.

The biggest challenge to growth in New Zealand is the provision of infrastructure. Across the country, communities are struggling with issues related to roads, housing, and water. These are challenges that central and local governments must tackle together.

We need to align local priorities with national objectives, cut red tape, fast-track consents, and make better use of new and existing funding and financing tools.

Last year, you heard then-Opposition leader Christopher Luxon discuss regional deals as a way to address New Zealand’s infrastructure deficit. Now in government, I’m pleased to update you on our framework for Regional Deals.

 

WHAT ARE REGIONAL DEALS?
 
A Regional Deal is a partnership between local and central government, built on shared objectives and outcomes.

These deals will transform the way central and local governments partner.

In the past, central and local governments have often moved like ships passing in the night—sometimes on parallel courses, sometimes not, but rarely working together as effectively as our communities, citizens, and constituents deserve.

Regional Deals mark a historic shift for New Zealand. For the first time, we are coming together to establish a clear plan—and the necessary infrastructure—right from the start.

A Regional Deal will be focused on:

 

  1. Economic growth and productivity.
  2. Delivering connected and resilient critical infrastructure.
  3. Improving the supply of affordable, quality housing.


At the core of each deal will be a negotiated 10-year strategic plan for the region, built on a forward-looking 30-year vision.

Our goal is to shift the dial locally and nationally on infrastructure projects by focusing on cutting red tape, supporting regional development, and growing the economy.

 

FRAMEWORK FOR REGIONAL DEALS
 

The framework we’re releasing today is a guide for central government, councils, and the private sector to work together to deliver for New Zealanders. It outlines our expectations for regional deals and our approach to selecting and partnering with regions.

Each deal will be unique but will focus on shared goals, long-term funding commitments from both central and local government, and a portfolio of infrastructure upgrades to housing, roads, and other critical infrastructure.

 

HOW TO GET A DEAL

Deals will be available to regions through a three-step process:

 

  1. Invitation to Councils: Selected regions will receive an ‘Expression of Interest’ letter inviting them to submit high-level proposals.
  2. Memorandum of Understanding (MOU): Central government and selected regions will confirm their intention to work together through an MOU.
  3. Final Stage Negotiation: This stage includes entering the ‘Pre-deal Queue,’ establishing structural aspects of the deal, assessing what Central Government work will be required to support the projects included in the deal, and finalising the deal and signed. 
     

Later this year, we will invite up to five regions to provide straightforward, ‘light-touch’ proposals. We don’t want extravagant, glossy documents. We’re looking for simple, in-house proposals to finalise the first deal by the end of 2025. Focus will be given on New Zealand’s geographically and economically diverse regions, including both urban and rural economies, and areas with existing high growth, and with growth potential. 

 

CONCLUSION 

This framework is just the beginning. We want a productive relationship with local government—enabling growth, development, and providing the tools to fund it.

But my message is clear and echoes the Prime Minister’s: we will only finalise deals with regions that focus on the basics and are committed to spending ratepayers’ money responsibly.

I’m energised by the potential of Regional Deals and look forward to working with you to make them happen.

Thank you.