Monday 27 July 2006

Rt Hon Helen Clark
Prime Minister

ADDRESS TO

Local Government New Zealand Conference

Town Hall
Wellington

9.30 am

Monday 27 July 2006

Many thanks for the invitation once again to address the annual conference of Local Government New Zealand.

This is the eighth consecutive year I have addressed this conference. The first time it was as Leader of the Opposition setting out the approach Labour would take in government to working with local government.

I have come back every year since to report on the work we are doing together, central and local government, for the communities we jointly represent.

I have always stressed the importance of collaboration and partnership to get the best results.

I believe that through the Central Government - Local Government Forum we have found a way of working together which is task focused and looks to meet challenges and solve problems. And that, after all, is what most of us come into politics, at whichever level, to do.

Let me begin this morning by acknowledging two areas of major effort by local government in recent times.

The first is the herculean efforts of those councils in the areas affected by extreme weather events in recent weeks.

The snow in Mid and South Canterbury and the heavy rain and flooding from the East Coast to the lower North Island have required full civil defence activation.

For the lower North Island the event brought back memories of the very severe floods of two years ago when so much damage was done, and these floods have done considerable damage too.

For Mid and South Canterbury the snow event was the worst in sixty years, depriving communities of power, roads, and phones.

I want to commend all councils and civil defence personnel involved for the way in which they responded to these adverse events. Your proven ability to rise to the occasion and work with affected communities is very heartening. While we can all learn from every event, and while we need to work more proactively to strengthen our resilience to such events, our councils and civil defence personnel do deserve our praise and thanks.

The second major area of effort has been on the completion by all councils of the Long Term Council Community Plans for the period 2006-16.

These plans were a requirement of the 2002 Local Government Act.

While it is the second time they have been produced, this is the first time they have gone through the full process.

Preparing the plans has required an enormous amount of engagement with communities.

The community outcomes processes identify your communities’ aspirations across economic, social, environmental, and cultural well being areas. They provide the starting point from which the details of your long term plans unfold.

Many of those aspirations will have identified actions which lie outside the traditional scope of local government activity.

That means councils are now facing questions about what role they have in providing for their communities. You have hard decisions to make on how best to allocate resources, which are never infinite, to different goals.

There are many desired community outcomes which can only be achieved in partnerships with others – including central government, and its many arms; business, non governmental organisations, and communities and iwi.

Central government is in exactly the same position. What we seek to achieve across economic, social and environmental policy, and cultural well being requires us to work collaboratively with local government and that wide range of non-governmental actors.

That’s why I was pleased to see Local Government New Zealand identify as the first item for discussion at our eleventh Central Government – Local Government Forum in March the opportunities for strategic alignment and collaboration between us.

Local Government New Zealand had taken on board the government’s three key strategic priorities of:

- economic transformation,

- families, young and old, and

- building national identity.

Local Government New Zealand asserted, and we agreed, that local government has an important role to play alongside central government in each of these areas.

Economic transformation requires our communities and our country to have sound, modern infrastructure – and providing that is a top priority for central and local government.

As you know the government has made very big commitments to the land transport programme, with total spending up around 134 per cent since 1999. Public transport spending now is eight and a half times larger than it was then. And we have guaranteed the state highway programme for the next five years.

I am aware that Local Government New Zealand is anxious to see the outcome of the review of the Financial Assistance Rates – and so am I. This review was requested by Hon Pete Hodgson as Minister of Transport. At this point the Ministry of Transport is consulting with Land Transport New Zealand on the views it has formed, and expects to report to Transport Minister Annette King shortly.

Local Government New Zealand has advised us that councils with large roading networks and relatively small populations are under pressure in meeting their current share of roading costs.

Central government has, as you know, come to the party in recent times with three schemes to support essential local infrastructure.

- The Sanitary Works Subsidy Scheme was established in 2003 to help small to medium sized communities upgrade or build sewerage systems. I announced improved subsidy rates for the scheme at this conference last year.

- Then in May 2004, we set up the Tourism Demand Subsidy Scheme to assist small communities with high tourist numbers to invest in water and sewerage infrastructure to sustain their local tourism industry.

- Now we are embarking on the Drinking Water Assistance Programme, which commits $154 million over ten years to improve the standard of drinking water in small communities. A discussion document on drinking water standards has been released, outlining options for deciding which communities would be eligible for funding, what kind of projects would be eligible, and much funding could be received. Ministry of Health officials are on a consultation round at present.

Consultation is also going on around the future shape of the fire service, following feedback on an earlier discussion document.

A workshop involving sixty representatives of key stakeholders was held in Wellington last week. There appears to be broad agreement that the current legislation and structures need updating. The government is now working to see if broad agreement can be reached on the way ahead.

No discussion of modern infrastructure can occur without reference to broadband.

Our government has now announced far reaching change to telecommunication legislation and regulation, with the aim of achieving faster, cheaper broadband across New Zealand. The new legislation is before Parliament now.

I acknowledge the proactive role many councils have played in promoting broadband roll out in their areas. Local government is acutely aware that broadband access and cost is critical to both economic and social development.

Natural disaster, including extreme weather events, has huge implications for community infrastructure, and, as I said earlier there is room to be more proactive in building our resilience to such events.

Arising out of the major snowfall in the South Island are issues around the resilience of the telecommunications network which the government is taking up with the telcos.

Then arising from the 2004 flood events, central government agencies are reviewing flood risk management, and are one year into the two year work programme.

On the advice of the National Institute of Water and Atmospheric Research (NIWA), seventeen councils have been visited and studied over the past eight months. Findings to date suggest that flood management practices are variable, and that good practice and innovation exist, but not consistently.

Other key issues appear to be that:

- local government needs better information to manage flood risk, including on the impact of climate change,

- we have an historic settlement pattern which limits our flood risk management options, and land suitable for future development without hazards in general is a scarce resource,

- provision for flood risk management is competing with other infrastructure priorities,

- central government needs to more clearly articulate expectations and standards, and demonstrate leadership.

The next phase of the review will shift to the respective roles of levels of government, funding and affordability issues, investigating standard setting, and to how to ensure best practice.

The government’s wider climate change programme will also be relevant in that it will contain new initiatives for afforestation and reafforestation - which are so essential for catchment management.

Both central and local government have had to invest heavily in the last two years in rebuilding infrastructure after adverse events. That’s why it’s important now to be looking proactively at the new risks climate change poses alongside the old risks of natural disaster, and to make reasonable provision to manage those risks.

Time today does not permit me to address in detail the opportunities for collaboration in the families and national identity strategic priorities.

In brief:

- Government does appreciate the work done by local government on social development and community infrastructure, from housing initiatives and support for senior citizens, to work to bring our diverse communities together, and to provide first class libraries, sports, recreation, and cultural facilities.

- We can, and are, partnering each other in many of these areas, through;
o innovative arrangements between Housing New Zealand and councils,
o schools, councils, local trusts, and businesses pooling funding for halls, sports facilities, and community hubs including libraries,
o the regional museums and galleries capital fund which is helping with building and refurbishment projects across the country,
o the Significant Community Based Projects Fund which is backing a range of major community projects.

Meeting the aspirations of our communities is expensive and it requires careful prioritisation. All councils are aware of this, and there is currently a good deal of debate about rates, which look set to increase per household by somewhere over seven per cent.

Central government assistance has been the fastest growing source of funding for local government over the period 1999 – 2005. In the year to June 2005 local government received $585.6 million in assistance. That does not include announcements made in the 2005 and 2006 Budgets with respect to drinking water and transport funding.

Draft LTCCPs show that in the coming year some $2.974 billion in capital expenditure is on the books for local government. Compared to ten years ago, according to Statistics New Zealand, in the year to June 1996, local government spent about $900 million adding to its stock of capital.

Around seventy per cent of this year’s capital expenditure will be spent on network infrastructure – roads, and so-called “three waters”, and waste management.

A further eighteen to twenty per cent will be spent on community infrastructure – libraries, community centres and halls, and sport facilities.

This bulge in infrastructure development is a consequence of many factors including, but not limited to:

- population growth, and

- economic growth, putting more pressure on infrastructure.

- increased community expectations, for example lower tolerance of environmental nuisances,

- consequences of past underinvestment in infrastructure, particularly decisions to defer maintenance and renewal work on water, sewage and roading assets,

- increases in the construction price index.

The extension of the Rates Rebate Scheme is a very significant initiative at this time, and will ease affordability issues for many low income members of your communities. Up to 300,000 households will benefit, with the maximum rebate rising to $500 per annum.

In addition, a number of work streams involving Local Government New Zealand and Internal Affairs officials are putting together a more rounded picture of funding issues, to see whether current funding arrangements are sustainable in the long term.

It is hoped some of these work streams will be completed in time for the next central/local government forum in September.

Commonwealth Local Government Conference

In closing can I also offer my best wishes to delegates and officials here involved in organising next year’s Commonwealth Local Government Conference.

In March 2007, New Zealand will host the fourth Commonwealth Local Government Conference.

The conference will attract delegates from up to 53 Commonwealth countries across Asia, the Pacific, the Caribbean, Africa, and Europe.

The opportunity to share knowledge and experiences is always valuable and I am sure that Local Government New Zealand will make the most of its exposure on the international stage.

I wish you well for the conference, and look forward to working with you over the coming year.

It is now my pleasure to declare the conference open.

ENDS

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