Hon Sandra Lee Speech Notes
"Expectations Of The New Local Government Act" --Keynote Address To The 2001 LGNZ Annual Conference, Michael Fowler Centre, Wellington.

Local Government New Zealand President Basil Morrison, Vice Presidents Dianne Hale and Margaret Shields, conference delegates.

Thank you for the invitation to join you this morning.

It is a pleasure to be with you at what will be seen as a milestone conference for all involved in local government, as you focus on the review of the Local Government Act 1974 and new legislation.

You scarcely need reminding that local government will face formidable challenges in the coming decades.

This, in part, is because of an increase in the number of people becoming more assertive and demanding, more vocal and more conscious of their rights as citizens in their community.

New Zealand¡¦s changing demographic profile brings some of those challenges into sharper focus.

The excellent and very detailed report released last month by the four Auckland cities together with Christchurch and Wellington, on the Quality of Life in New Zealand¡¦s Six Largest Cities, highlights many of the demographic changes.

For example-
„h Ethnic diversity and a growing migrant population. A growing number of ethnic groups--some 30 significant groups, including refugee groups--now reside in New Zealand, each with its own characteristics, traditional ways and needs.

„h Increasing income inequality over the past decade.

„h An increasing number of children live in low income or single income families. Maori, Pacific Island and Asian children are over represented; and

„h An ageing population, especially the European population.

Population increases in the Auckland region are projected to continue.

About half of New Zealand¡¦s population growth over the next 20 years will occur in the Auckland region.

Manukau City should replace Christchurch as New Zealand¡¦s second largest city by 2005.

The quality of life in New Zealand in future will probably depend more on the quality of our environmental management than any other single factor.

Global warming, habitat degradation, the over exploitation of natural resources and the introduction of exotic pests such as saltmarsh mosquitos make for a bleak outlook.

They have the potential to impact severely on the way of life we are accustomed to.

Amidst the gloom, I believe there are grounds for optimism.

Energy prices may fluctuate but the energy conservation and efficiency programmes being put in place by the Energy Efficiency and Conservation Authority demonstrate that our homes can be warm and comfortable without high energy consumption.

We are a world leader in nature conservation, thanks to the high calibre of our conservation managers and scientists, and to record increases in biodiversity funding by this Government.

One of the most exciting conservation developments in recent years is the proliferation of community groups, iwi and others actively undertaking nature restoration and environmental clean-up and enhancement projects in their own backyards.

The support of many councils right around the country for these projects is extremely gratifying to me as Minister of Local Government and Conservation.

I commend local authorities for the willingness you have shown to take greater responsibility for conservation, biosecurity and environmental protection.

The Prime Minister has just outlined the economic development programmes this Coalition Government has set in place.

The Six Largest Cities Report outlines in some detail how adverse factors affecting families can ultimately impact upon the economic growth of a region.

Most of the big issues cross local and central government boundaries.

This Coalition government came to power determined to create partnerships.

We want to create partnerships so that regions and industries can work together with the ¡§whole of government¡¨ to develop New Zealand¡¦s economic base.

This government is strongly of the view that local government is an integral part of our system of democratic government.

Central government and local government need to be able to work together as partners to tackle the big issues successfully.

Both the Labour Party and the Alliance campaigned on the basis that in government we would modernise and further democratise local democracy.

You made it clear that change was overdue, we listened and our pre election platforms reflected that.

Since becoming the Government we have acted on our promises.
The Labour-Alliance coalition has a faith and a belief in the principles of good, democratic, local governance. We have made it clear that we are committed to a partnership relationship with you.

No longer is it the case of ¡§we talk-you listen¡¨ on central government¡¦s part- something most of you will have been only all too familiar with in the past.

We are talking about a real partnership that delivers for all New Zealanders.

I would like to make it clear that we are not talking about devolution.

This government will not try to push its responsibilities, in the area of social policy for instance, onto local government.

As we discussed at last year¡¦s conference, if local authorities are to deliver on social, economic, cultural and environmental development at the community level, they need a "more enabling" legislative basis.

Why?

Because sustainable economic development is becoming increasingly important for regions.

Investment in the processing of natural resources such as forestry or fisheries, in tourism enterprises, information technology companies such as call centres or software development -all bring with them their own sets of employment, environmental and infrastructure challenges.
I have no intention of pre-empting the consultation process now under way on the review of the Local Government Act.

But I believe that in order to be able to respond effectively to the changing needs of their communities--some of which I have just outlined--local authorities must have greater flexibility, through broadly based empowering legislation.

However there is a fundamental balancing act that also has to be carefully managed through this review.
Local Government must be responsive to its communities.

To achieve that, it must be empowered rather than shackled, but with that empowerment must come accountability and responsibility.

The new powers must be flexible.

But it is also important to ensure that the individual¡¦s rights to participate in local democracy are preserved by central government, so there are some areas where there must be prescription.

The Local Government Act review has looked at current best practice in the sector, and looked to ensure that the new Act will be pitched to spread the lessons that can be learned from that best practice.

How will the balance between local government and its communities be given effect?

The new Act will envisage that the elected council exercise its governance role by managing two critical relationships:
„h with its communities; and
„h with the local authority chief executive, and the organisation the chief executive leads.

Of course, life is not static.

So the new Act will need to be underpinned by "best practice" governance.

We share the view that it is generally not possible to legislate for good governance practices, but rather that they should be developed jointly by the sector and central government, and regularly reviewed.

My officials are keen to work with you to develop mutually agreed "best practice" guidelines.

Hand in hand with governance must go consultation, through public participation in the governance process.

In my speech to your conference a year ago I pointed out that, as a general rule, only about half of all eligible voters participate in local body elections.

It is clearly desirable that voter turn-out is improved.

In addition, we need to continue to find ways to increase public participation in local authorities' annual planning cycles.

The challenge for everyone in the local government sector is addressing how to make people aware of what you do, what you propose to do on their behalf, and once aware, actually get them to participate in it.

To be successful, our democratic institutions require public participation.

If your communities appear unwilling to come to the party, it is up to you to find out why and determine what can be done to ensure that they do.

One of the key underlying purposes of the new Act will be to encourage increased participation of citizens and communities in local government.

We want communities to make decisions for themselves and for communities to take ownership of the results of those decisions.

It is fundamental for a healthy democracy.

We want to encourage increased participation.

In order for this to happen the community needs reliable user-friendly information and processes that encourage increased participation.
I see the proposed Long Term Council Plan, as a key element in making this happen.

The Long Term Council Plan will integrate social,
environmental, cultural and economic activities.

It will demonstrate how all the things a council does are linked together.

It will include the identification of desired community outcomes, the role of the council in achieving those outcomes through its services, activities and policies, and through partnerships with others.

The importance of partnerships has already been stated by the Prime Minister in this Government¡¦s approach to regional development.

I anticipate the Long Term Plans will link to regional development strategies.

The current onerous and time-consuming annual planning requirement will become a streamlined Annual Plan with a focus on current issues, within the context of the Long Term Council Plan.

In addition to the Long Term Council Plan there are other mechanisms I see increasing public participation.

The first step towards encouraging increased participation is the Local Electoral Act 2001 which was enacted in May.

The new Act provides:
„h A clear statement of purpose including flexibility to accommodate new technologies, uniform rules and a choice of electoral system and voting method;

„h A clear statement of principles including fair and equal representation for individuals and communities;

„h For Candidate profile statements in both English and Maori; and

„h For limits on candidate spending.

A Local Government Funding Powers Bill is due to be introduced in the House shortly, and should be enacted before the end of the year.

With these three Acts in place, local government will have modern powers to deal in modern ways with the pressing issues you all face.

After all, for most people, local issues and problems have a greater impact and a more immediate significance than issues at the national or central government level.

The new Local Government Act will seek to clarify the relationship between Maori, the Treaty of Waitangi and local government.

If the new system is going to work for all our communities, it needs to be inclusive.

The review consultation process should identify any concerns of Maori with the way local government currently operates, so that these can be taken fully into account in the design of the new legislation.

The Government has not put forward any detailed proposals on this issue at this point in time.

We felt that it was desirable to seek imput from the sector, Maori and community before reaching decisions on this important matter.

We look forward to your views on what you consider the relationship should be and your views on the nature and extent of that relationship.

Turning for a moment to the Funding Powers Review and the Financial Management section of the consultation document.

The scope of the Funding Powers Review was narrowed after Ministers decided that the processes by which local authorities consult on and decide how to fund their activities, would be part of the Local Government Act review.

This has enabled decisions to be made for the new Funding Powers Bill.

The Prime Minister indicated publicly last week that this process has now been completed.

I would note however that some issues span both the Bill and the Local Government Act review.
The objective of the Funding Powers Bill will be to update and simplify existing powers and responsibilities.

As you know, the government has decided that general rates should continue to be the main mechanism to raise revenue from your communities.

Existing categories of exemptions will remain, although further work will be done on whether or not the Crown should make a contribution to local government for exempt Crown properties.

I think you will agree that the new financial management provisions, that came into effect in the 1998-99 financial year of most councils, have worked well.

It is proposed however that a council¡¦s financial management policy be integrated with the new Long Term Council Plan.
Many of you have identified other issues that need to be considered here, namely:
„h the requirement to fully fund depreciation each year;
„h developer contributions; and
„h funding decision-making by councils.

No doubt we will receive many submissions on these topics!

Other tidy up areas include councils¡¦ powers of regulation and the introduction of a more streamlined process to allow the reorganisation of local authorities to be considered by communities, should changing circumstances make the existing structure no longer appropriate.

The government also plans to hold discussions with Auckland local authorities on the best process for dealing with a number of Auckland-specific provisions in the current Local Government Act.

LGNZ has been in on the ground floor, with my local government officials and other interested government departments, since the beginning of the review process and has made a significant input to policy development in this area.

This process has been almost unique in the way Government works.

I want to take this opportunity to thank you, as an association, for your very positive attitude and contribution to this ongoing exercise.

A lot of work was done by everyone to get the consultation document to the stage where it could be released into the public arena.

Much more work needs to be done before I can introduce the new Local Government Bill to the House.

I don¡¦t expect miracles, where everyone is fully satisfied with all aspects of what is proposed.

But please remember that you will have the opportunity to make further submissions at the Select Committee stage of the process about any remaining aspects that you are concerned about.

This Government truly believes in the democratic process, at the central and the local levels.

It believes that local government has a really significant role to play with its communities, into the future.

We know that there may be some communities out there that expect only limited services from their local authorities, but others want their local authorities to be more active in helping them to find a way to a better
future.

We want to make sure the legislative framework that councils will operate under in future will provide for that diversity, in a responsive and responsible way, and that the framework enables councils to work closely with their communities, and that it will encourage people to participate more in these local decision making processes.

The new Act will be the centrepiece of the Coalition government¡¦s legislation in the local government sector.

It will empower local government.

It will give you the flexibility to deal with the issues. It will give you the responsibility to deal with issues.

It will give you the ability to respond to community aspirations.

It is however, by no means one way traffic.

The balance between empowerment and accountability is critical.

Communities will be able to hold councils more accountable for their actions.

The spotlight will be on councillors, as the community¡¦s democratically elected representatives, to deliver on the community¡¦s needs and aspirations.

Most importantly, the Act will "put the local back into local government", as we promised last election, and enable communities to make decisions for themselves.

We are on schedule to deliver legislation which should endure for decades and which will empower local authorities whilst releasing them from the shackles of the old prescriptive act.

While the new Act is not revolutionary I certainly expect that it will have a significant impact on all citizens and communities over time.

I wish you well in your deliberations over the next two days.

Together with my officials I look forward to receiving your submissions on the proposed reforms.

Ends

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