The tension between central and local government bubbles to the surface

The Spinoff

2 days ago

Local government says it needs certainty from central government beyond election cycles. Central government says local government is wasting money on unnecessary projects. Who's right?
Simon Watts, minister for local government, has kids. He's learned that when you give them a full day free to do whatever they want, they might 'make some bad choices'. But give them five options, and they can pick the one they want to do.
He's on stage at SuperLocal, Local Government New Zealand's annual conference in Christchurch, answering a question about the government's move to stop 'wellbeing' and 'the environment' being part of councils' remit. 'People don't have an appetite for nice-to-haves,' he says. 'You weren't elected to make easy decisions, you were elected to make difficult decisions. The best thing I can do is to help you on that journey.'
Broadcaster Miriama Kamo, hosting the discussion, pointed out that some local government members might not appreciate the metaphor. 'That's a bit patronising, mate,' someone yelled from the audience.
At SuperLocal, the tension between central government and local government is nearly palpable. A brief, videoed address from Christopher Luxon is met with about three people applauding. With RMA reform and a potential rates cap on the agenda, the government is saying that councils are spending too much money on unnecessary projects. Councils are saying that actually, they are focusing on basics – and ever-changing directions from central government is a waste of their resources.
Chris Bishop, the minister for RMA reform, addressed attendees at a plenary session. 'Ratepayers don't care what Greenstar rating your new council facilities have or whether some international architectural body thinks your latest build is pretty or not. The only awards your projects should be winning are for cost efficiency and effectiveness,' he said. There was an audible groan somewhere in the room.
He kept going, talking fast to get through his speech, saying that councils needed to be better at planning for housing growth and that the government needed to make this easier. He promised two bills by November: one to replace the development contributions system so that developers pay more for infrastructure their new housing will require, and another to fund infrastructure development.
Bishop's key announcement was also aimed at council efficiency: with whatever replaces the RMA on the way, he is removing (in most cases) the requirement for councils to take the RMA into account when making their plans. 'Plans completed under the RMA may be incompatible with the new system,' he said. Most plan changes will have to wait until the new system is in place, although particularly urgent changes, or changes related to Treaty settlements or natural hazards, will be exempt.
'Minister Bishop's announcements today were really good for local government to hear, with some certainty about where the RMA is going, [and] the timeframes around when we're going to hear further announcements,' said Sam Broughton, Selwyn District mayor and president of Local Government New Zealand, at a press conference afterwards. On the whole, though, local government is frustrated, because they feel that they're not using their budgets on 'nice to haves'. 'If I use my council as an example, 80% of our spend is on water pipes, wastewater pipes and transport systems. So the other 20%, you've got to include your recycling, your rubbish, your pools, the things that actually communities still think are essential.'
To Broughton, and local government in general, changing directives from central government make it hard to plan long term, making councils more inefficient and wasting resources. 'Every time we have an election, there's a flip-flop, and it's just a distraction from us getting on with the work,' he said. One government wants wellbeing and environment to be part of plans; the next doesn't. One government wants to overhaul the RMA in one way; the next wants to overhaul the RMA in another way. 'We need ways of doing things so changes of government don't rip up previous governments' work – a pipeline of work that is agreed cross-party,' Broughton said.
To prevent what he sees as wasteful council spending, the government is investigating legislation that would cap how much rates can rise, said Watts. 'It has to achieve the outcome that we're looking for.' The giant Taxpayers' Union truck parked outside the Te Pae conference centre emblazoned with pictures of mayors and how much rates have increased in their regions is a reminder of vested interests in this issue. But linking rates to household inflation doesn't make sense, Broughton said; much of what councils spend money on isn't in the CPI basket. 'Rates capping itself is actually a discussion about who makes decisions locally about what's delivered. Is it central government? Is it more power to Wellington?' Broughton said, mentioning that New Zealand is one of the most centralised countries in the OECD, with central government controlling the vast majority of government spending.
Part of Wednesday's conference session was the release of an LGNZ-commissioned report quantifying local government's economic contributions: $20.1 billion operational and capital expenditure, $2.2bn in public administration and $500 million in long-term productivity gains. 'There's some basic things that councils have to get involved in because central government isn't stepping up to fit the needs of local communities,' said Broughton. His council is funding a health centre, because many people in Selwyn have to leave the district to go to the doctor.
While there's certainly tension between central and local government, there's also a desire to get things done. Broughton was asked about Simon Watts' 'kids' comment at the stand-up. 'I think people like to play politics around language,' he said. 'But Minister Watts has also said he wants a situation where we sit around the table as adults. Councils get elected locally to think about what's in the best interest of their local community. And that is really hard work that requires mature minds.'