Local reform coming, ready or not

It's only the start of 2013 but already the chatter about next year's general election is notching up.

That's partly thanks to this week's Cabinet reshuffle.

The ministers now in place will serve through to the presumed polling date in November 2014, barring career-ending gaffes in the meantime.

Yet before the national poll, there are local body elections scheduled this year. It's here that the Government faces some of its big political challenges, with potentially significant influence on next year's general election.

That's because mayoral and council elections are on a direct collision course with a complex, overlapping agenda of central government reforms, whose combined impact on local government is likely to be profound.

The tests of political management thrown up by this convergence are especially intriguing because it creates unusual pressures for a Government with a reputation for talking big, then backing off.

In this case, there are simply too many moving parts for the Government not to make some tough calls.

The range of reform agendas in play spans council amalgamations, fundamental Resource Management Act reform, urgent decisions required on freshwater allocation and standards, housing affordability and urban limits, and the future funding of roads, drains and water infrastructure.

None of these issues alone makes headlines the way this week's "death to cats" campaign did. But each involves deep thinking and difficult trade-offs.

Getting a coherent set of decisions will be difficult enough, let alone explaining them.

In the meantime, local body and Opposition politicians will likely exploit the far simpler proposition that central government meddling in local affairs is an assault on local democracy. Of course, that rallying cry made no difference to the Government's determination early in its first term to create the Auckland super-city - an initiative that has produced far less political heat than might have been expected.

But that was a long and more popular time ago. Accusing the Government of being hell-bent on reducing local democratic rights is more potent, four years on, in light of evidence such as the suspension of the Canterbury Regional Council and ministerial encouragement of merger talks.

In order to win the argument, the Government must be depending on a big gap between what local body politicians say people want and what a majority of ratepayers actually think about the quality of their local government.

After all, an enthusiast for local democracy may also be a vigorous opponent of the latest rates increase and the uses to which council funds are put. Who among us hasn't questioned the refurbishing of a perfectly good footpath or cringed at some dubious, city-funded artwork?

So, just where the public stands on council amalgamations remains to be seen.

On one hand, no small community welcomes the prospect of being governed by some larger, less intimate neighbour.

On the other, there has perhaps never been so much discussion up and down the country about the potential for small local bodies to amalgamate not only to create larger rating bases, but also to do a better job than is possible for smaller, underfunded local ones.

Given the momentum in the conversation and the Government's desire, expressed in reforms last year to the Local Government Act, to rein in council activities, the mood for reform has rarely looked more favourable.

Of course, natural communities of interest need to be recognised.

That's why the amalgamation of Wairarapa's three, sub-scale local councils appears almost uncontroversial, even as a debate rages south of the Rimutaka Hills on whether to make Wellington a super-city.

Wairarapa simply isn't Wellington and has always sat oddly in the Wellington Regional Council. But the tiny rating bases of the three Wairarapa councils are typical of the difficulties the country's 79-odd local bodies face.

Not only are many unable to fund their needs, but they lack the ability to pay and attract the talent required to make the sophisticated judgments required to provide local infrastructure well.

The results of such shortcomings are evident across the country, from the stench of Whanganui's poorly built, but brand new waste treatment plant to the ratepayer revolt in Mangawhai over the mad expense they face for a new wastewater facility.

In the end, the Government may choose more subtle means to force amalgamation through initiatives to force economies of scale.

Last year, new bulk procurement arrangements for local body roads funding, accounting for about a third of total local government spending, were initiated. No matter how much small councils might want to go it alone, they will be forced to work together in this vital area of infrastructure.

Now there are plans to do something similar with procurement of fresh and wastewater treatment funding - accounting for most of the remaining two-thirds of local bodies' spending.

If forced into collective arrangements for the bulk of their core activities, something close to council amalgamations might just be achieved anyway.

- BusinessDesk