Changes to local government bad for local democracy

Green Party Minority Report – Local Government Act 2002 Amendment Bill

Some 518 individuals, organisations and local authorities took the time to write thoughtful and constructive submissions and many appeared before the committee during hearings in Auckland, Hamilton, Wellington and Christchurch. The “vast majority” of submissions opposed the Bill. Given this, the Green Party is disappointed that more weight was not given to the issues raised by submitters and that Government members declined to amend the Bill to reflect public and submitter concerns.

The Green Party opposes the Bill, particularly:

–       The changes to the purpose of local government and the deletion of the “four well-beings” (social, economic, environmental and cultural);

–       The increased mayoral powers;

–       The loss of democracy represented by the increased powers of Ministerial intervention and the processes for how and when this will be used;

–       The content of the fiscal benchmarks and

–       The undemocratic procedures and criteria for council re-organisation.

Purpose of local government and “four well-beings”

The Green Party agrees with the assessment by Local Government NZ and SOGLM that: “The scale of the change signalled in this Bill…[has] the potential to create the most significant change to the sector since the amalgamations and accountability review of 1989. We would have expected that such proposals would have been grounded in top quality policy analysis, and a robust assessment of all of the available evidence. One only need look at the first page of the RIS to conclude, that for the most part, this has not been the case.”[1]

The lack of sound data and information or any robust analysis to support the changes in the Bill risks it being ineffective, having unintended consequences, and putting additional costs on councils and ratepayers, such as to amend long term plans.

Like the “vast majority” of submitters, the Green Party opposes the changes to the purpose of local government in the principal Act and the deletion of the promotion of the four community well-beings and their replacement by the narrower, more restrictive purpose in clause seven. The new purpose does not accurately describe the role of local government in New Zealand and councils’ relationships with their communities.

Many councils and community organisations highlighted councils’ central role in “place making” – creating attractive and healthy places to live and work in which attract investment capital, entrepreneurs and skilled workers.

Submitters presented evidence on the many significant and diverse activities and services which councils provide or help support. These include early childhood education, premises for medical and health professionals, community care for the disadvantaged, funding for riparian management, crime prevention and the arts.  These matters can be as important to communities’ long term economic viability, growth and development as infrastructure provision.

As the Human Rights Commission observed, “Local government decisions, including how services are provided, are often the most direct expression of the democratic process (or lack of it).”[2] The Green Party believes that the change to the purpose will undermine councils’ autonomy and their ability to deliver on their communities priorities.

As the Tasman District Council noted, “The benefit of the current purpose of local government stated in the LGA 2002 is that it focuses councils and communities on ensuring council activities and services provide community wellbeing. It enables councils to identify what is important to their specific communities and to meet the needs and preferences of those communities.

“What councils do is ultimately determined in consultation with their communities. Any council not reflecting the needs, wishes, and preferences of their communities will not last long.” [3]

Council submissions and evidence suggested that rates increases are more likely to be the result of infrastructure provision, addressing historically deferred maintenance and new regulatory responsibilities rather than the current statutory purpose of promoting community well-being. The Green Party agrees.

The Society of Local Government Managers (SOLGM) noted that, “there is little evidence to suggest that the sector is not focussed on so-called “core” services. Three different reports concluded that the sector has not significantly expanded the scope of its activities since 2002. Analysis of the 2006 and 2009 long term plans (LTPs) shows that between 70 and 75 per cent of the capital programme is on roads, the three waters and flood protection.” [4]

Submitters including the Auckland District Law Society noted that the new purpose will cause legal confusion and uncertainty and risks legal challenges to council decisions.  Accordingly it has a potentially “chilling” effect on council decisions if councils take a narrow view of their roles and do not invest in facilities or services other than infrastructure which are important to their communities. This potentially creates funding gaps, and risk services not being provided.

Role and power of mayors

A number of submitters opposed the increased powers for mayors because of the risk this posed to a constructive and collaborative working relationship between the mayor and councillors.  The Green Party endorses these concerns.

Ministerial intervention powers

As the Human Rights Commission noted, “Effective democracy demands respect between the different spheres of government and recognises the defined roles that they play in serving their citizens.”[5]

Submitters noted that the proper accountability for a council is directly to its community through consultation and electoral processes. By significantly increasing the power of the Minister to interfere with local authorities, the Bill changes the balance of power and accountability from the community to the Minister and central Government. This is a significant constitutional change which has not been widely debated and undermines local democracy and democratic processes. It creates a significant risk of wide discretionary powers being transferred to non- elected appointees contrary to the other purpose of local government in the principal Act which is to enable democratic local decision making and action by, and on behalf of communities. This is opposed.

Submitters concerns about these powers included the broad definition of a “problem” which “justifies” Ministerial intervention by way of Crown observer, Crown manager, Crown review team or appointed commissioners; and the absence of any checks on the Ministerial power, such as a requirement for prior advice from an independent agency (such as Local Government NZ) to confirm the existence of a “significant problem.”

The Green Party shares those concerns. It opposes the low thresholds for intervention, the lack of clarity in the definitions of “problem” and “significant” and the potential for inappropriate use of the Ministerial intervention powers. It opposes the link between the fiscal benchmark requirements and the triggering of the intervention powers as giving the Minister an inappropriate amount of discretion as to when to intervene.

The Green Party is disappointed that few of submitters’ many constructive and detailed suggestions to clarify and better define the intervention powers, and to require costs any appointees to be shared with central government were implemented.

The Green Party supports submitters who suggested that other options (which would not require legislative change) would better assist councils avoid or address potential governance or financial prudence issues. These include improved governance and financial training for councillors; more guidance materials and greater assistance from experts appointed by the Local Government NZ and SOGLM; and mentoring opportunities.

Fiscal responsibility requirements

The Green Party supports the contention that local authorities must conduct their affairs in a fiscally responsible manner and keep both rates and debt at sustainable levels. It notes that the fiscal prudence of the majority of local authorities has not been questioned and that none of the councils perceived to be in difficulty has defaulted on their debt servicing obligations.

It agrees with Auckland Council and other submitters that the Bill’s system of financial benchmarks will degrade rather than enhance councils’ ability to manage their affairs in a financially prudent way.  This is because link between the financial benchmarks and the Ministerial intervention powers is likely to hasten the evolution of the benchmarks into de facto caps on rates and council debt which councils would feel forced to comply with, reducing their ability to act prudently.

The Green Party supports a strengthening of the balanced budget requirements in section 100 of the principal Act as an alternative to the Bill’s benchmarks.

Re organisation

As the Secretary General of the United Nations has noted: “Democracy implies far more than the mere act of periodically casting a vote… it covers the entire process of participation by citizens in the political life of their country.” [6]

The Green Party opposes the “streamlining” of council reorganisation where this undermines the democratic right of local communities to reflect their diversity and decide their own council governance structures. As one submitter, Sarah Walters said, “This is not streamlining, it is steam rolling.”

The Green Party’s particular concerns include:

–       The Local Government Commission rather than communities make the decision on reorganisation;

–       The lack of an automatic poll on a final reorganisation scheme and the burden on communities of having to organise a petition to achieve a poll.

–       The short time and large number of signatures required (10% of electors) for a community petition to achieve a poll.

–       The requirement where a poll is undertaken for this to be over the whole affected area, rather than each council area affected by a reorganisation proposals.

–       The exclusion of “effective local community representation” and consideration of “representing communities of interest” as key criteria for assessing reorganisation proposals.


[1] Submission of the Society of Local Government Managers (SOLGM) at p 6

[2] Submission of Human Rights Commission at p2

[3] Submission of Tasman District Council at p 4.

[4] Submission of the Society of Local Government Managers (SOLGM) (July 2012) at p7.

[5] Submission of the Human Rights Commission at p 6

[6] Secretary General of the United Nations A/46/609 and Corr.1, para 76 quoted in submission of Human Rights Commission  at p 8


6 Comments Posted

  1. The Green Party notes ..”and that none of the councils perceived to be in difficulty has defaulted on their debt servicing obligations.”

    Duh – of course not.

    They can simply demand hundreds of dollars more from every rate payer, and it has to be paid by law!

    I’d love to be able to go massively into debt to buy something none of my clients actually want, then force EVERY one of them by law to pay my loan.

    I would never default on debt servicing either.

  2. Egytoo
    What difference does geographic size make in a place and time where communications over any distance are immediate for sound and vision?

    21st century ! ! !

  3. If Los Angeles, the city, was the same geographical size as New Zealand, Dave Stringer would have a point. Oh well never mind, back to the drawing board.

  4. The loss of democracy represented by the increased powers of Ministerial intervention and the processes for how and when this will be used is the majot problem for citizens

  5. I like knowing who my mayor and local councillors are, and more than that, I really like that they know who I am.

  6. So here’s my problem with local government in New ZEaland.
    Los Angeles (the actual city, not the region) has a population of 3.82 million people (just a tiny bit smaller than New ZEaland) and manages to govern with 15 elected councillors.

    We, on the other hand, are innundated with local governments and elected representatives, all of which take vast support structures to maintain.

    If we were to limit the size of a local government to a MINIMUM of 500,000 people (neither a large nor small number in the nature of these things globally, we would have a vast amount of money to spend on other things, like improved education, improved renewable energy production, improved policing, improved . . . . . . well, just about anything on the list of improvements demanded by opposition parties for the last 100 years!

    Lets get real about a balance between representation and affordability. The UK can manage with 650 MPs for 62.64 million people (ratio of 96,370:1) but we need to have 120 for 4 million (ratio of 33,340:1). We can’t afford to have such drastic ratios, AND have an affordable clean green oasis of exceptional living standards. Cities like Los Angeles can manage with a ratio of 25,000:1 for its local government, while Wellington needs a ratio of 11,967:1

    Less government – more investment – – – – – – – – – PLEASE

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