Rethinking local government

by Fiona Rae / 03 March, 2012
When central government, businesses and households are having to be much more frugal, it behoves councils to do the same.


After the last general election, the first sentence of the written briefing given to the incoming Minister of Local Government, who happened to be Nick Smith, read, “As Minister of Local Government, you will set the direction and priorities for the local government portfolio.”

Smith’s detractors may accuse him of many things, but failing to follow the brief cannot be one of them. In an interview with the Listener, published in last week’s issue, Smith certainly set the direction. No one who reads that article can claim not to know where he is coming from or where he is going in the local government portfolio.

But even for those who agree with his direction, the problem will be that to a large extent it is not up to the minister, or even to central government at all, to direct local authorities. They are answerable to ratepayers, as they should be. Yet voter turnout for local body elections and public attendance – or, more accurately, the lack of it – at local authority meetings seem to indicate a curious apathy among ratepayers about how their money is spent. At the last local body elections, which involved the selection of the inaugural Auckland Council and were held only a month after Christchurch’s initial devastating earthquake in September 2010, national voter turnout did not reach 50%.

This lack of action belies the importance of local government, and probably says more about the low profile of individual councillors and their agendas than it does about the bigger issues that are usually at stake. And sometimes those issues are very big indeed. Although those who put themselves up for election do so with a genuine ethos of service to their communities, they can sometimes find themselves out of their depth, particularly when dealing with highly experienced, and often much more powerful, council staff.

There have been the well-publicised cases recently in which ratepayers have been shocked and angered to learn of considerable salary increases being awarded to chief executives. Further, and as also reported in the Listener, sometimes councillors accept those pay recommendations from outside consultants who also get work put their way by councils. Transparency in that process would be in everyone’s interest. But steam is gathering on many other issues, too, as a result of huge rates hikes in some regions, largely the consequence of poor decisions.

We should be wary of reforms that could simply compound wasteful spending, but Smith is right to suggest we need another rethink. The legislation that in 2002 gave councils – or burdened them, depending on your point of view – a huge sweep of responsibilities means they are able to pursue pet projects if they can afford them, and sometimes even if they can’t.

Although many councils rightly point to a pressing need for significant investment in infrastructure, that doesn’t mean every local authority needs its own international airport or major aquatic centre. In some cases, risky spending on sporting extravaganzas and cultural festivals has also proven disastrous.

Smith’s message is that local authorities must pull their heads in. For many ratepayers in this economic environment, the reliable provision of core services and a modest aspiration of each council to leave its territory in no worse condition, and with adequate provision for future growth, would be quite enough, thank you. When central government, businesses and households are having to be much more frugal, it behoves councils to do the same. Rates have increased 7% a year on average for the past decade. That is much higher than the rate of inflation. It is inevitable that major infrastructural spending will involve long-term debt and that is appropriate since the benefits, if the spending is worth it, will be inter-generational. But debt also has to be carefully managed – Kaipara District Council’s problems with its Mangawhai wastewater scheme are a salutary lesson in how it can easily go awry.

Change is always with us, and just because things are done one way now does not mean they shouldn’t be done differently in the future. New Zealanders seem to accept that is how central government should operate – the same is surely true for local government as well.
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