Changes to the Local Government Act could wipe out some of the region's biggest council projects if they go ahead in their current form, Southland leaders say.

Submissions to the parliamentary select committee looking at local government reform were heard at Wigram Air Force Museum in Christchurch yesterday.

The Government introduced the Local Government Act 2002 Amendment Bill to Parliament in June.

The new legislation would remove councils' obligation to look after the economic, environmental, cultural and social wellbeing of their communities and replace it with three core principles of local infrastructure, local public services and regulatory functions.

Invercargill Mayor Tim Shadbolt and chief executive Richard King submitted yesterday morning.

The pair were involved in a heated debate with the select committee about what constituted the "four wellbeings", Mr Shadbolt said.

"All the councils are divided . . . but the one thing we are totally united on is the four wellbeings."

Under the new law as it is currently worded, he said, the Southern Institute of Technology Zero Fees scheme could not have been set up and could be open to challenge if even a single complainant decided to take the council to court.

The same applied to Venture Southland.

It was not clear if Venture - which promotes economic and community development, events and tourism in the region - could have been formed under the proposed legislation, Mr Shadbolt said.

"If it was challenged in court we may have to wipe out Venture Southland.

"If someone takes us to court and says that doesn't fit within your core activity . . . it might just be one ratepayer and it would affect the whole country," Mr Shadbolt said.

The organisation received $3,302,450 from Southland councils in 2010-11.

Southland District Mayor Frana Cardno, who was also in Christchurch yesterday, described the reforms as a threat to local democracy.

"What we are saying is there's a huge risk for the rest of New Zealand, not just us." Mrs Cardno, who led her council's presentation, said it would stop councils undertaking vital activities, such as the $320,000 it had committed to renovating Winton Hospital.

The reforms also include a provision for voting on amalgamation.

Under current law, a majority of voters in each district must vote in favour for an amalgamation to proceed.

The reform would see a majority needed across the combined voters of the districts.

Mrs Cardno said this could see rural districts - the economic backbone of the country - forced into amalgamation against the will of ratepayers. "I pointed out what we produce in exports," she said. It's vital the rural communities are represented."

Environment Southland and Gore District Council representatives also spoke at Wigram yesterday.

- © Fairfax NZ News

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