Local government reforms being watered down

16:00, Mar 20 2012
John Key
EASING BACK ON REFORMS: Prime Minister John Key.

The Government is already watering down its proposed radical reforms of council functions, saying cycleways, boat races and rugby stadiums could all be in the public interest.

Under the proposals announced on Monday Local Government Minister Nick Smith and Prime Minister John Key, councils would be expected to provide only core public services, such as local infrastructure and regulatory functions.

They would no longer be responsible for the social, cultural or economic well-being of ratepayers.

However, many councils complained that they were being given a confused picture.

Dr Smith said yesterday that the changes would still allow councils to provide the things their communities wanted.

"We are wanting to pull back from that very broad purpose statement currently in the act that effectively lets council do everything from buying farms to buying freezing works. In fact, the current constraints are basically negligible, they can do anything," he said.

Mr Key said: "What we're saying is here's the demarcation line, it's a little narrower than what it was in the past but there's still plenty of scope."

Exactly what constituted a "public good" would be defined in the legislation but it would be intended to focus councils on the provision of core services.

"There can easily be a public good in hosting an event like the Volvo Ocean Race, and there's clearly a public good for Auckland, it'll bring tourists in."

The cycle way, which he had promoted, could also be a public good, he said.

Mayors and Dr Smith held a meeting at Parliament last night in an attempt to clarify the position. Before the meeting, Upper Hutt Mayor Wayne Guppy said "chaos would reign" if it was not made clear exactly what the reforms would affect.

Wellington Deputy Mayor Ian McKinnon said he understood Dr Smith's motivation in wanting to get council debt and rates under control, but the devil would be in the detail.

"The real difficulty is going to be defining exactly what local government can and cannot do to ensure those financial constraints."

After the meeting, Mr Guppy said Dr Smith wanted taskforces set up to investigate the efficiency of each council and refocus the purpose of local government.

Details of the changes would be known in about the next six months. "It's foot to the pedal by the look of it, and changes are going to happen pretty quickly.

"There's no question from the point of view of the minister that change was needed. From my point of view, we will have to work within different frameworks."

After Monday's announcement, local government agencies said central government would have to step up and fund some events or risk them being cancelled if councils could no longer raise the money needed.

Tourism Industry Association spokesman Simon Wallace said reducing local government support of the industry would be short-sighted and could have dire economic consequences.

Local government specialist Christine Cheyne, an associate professor at Massey University, said the constitutional effects of the reforms were worrying.

They were largely a "knee-jerk" reaction and risked upsetting the balance between local and central government.

"While the proposed reforms might appeal as short-term austerity measures, the long-term legacy of a lack of vision about the role of local government in a democracy is a concern. New Zealand is already regarded in international comparisons as highly centralised.

"Who is best to know what communities need better than local government? Central government can't do that."


Fairfax Media