Rodney Hide

4 May, 2009
Speech to Local Government Authority

Good morning. I am pleased to have this opportunity to speak to you today about the many exciting developments underway in local government.

I am particularly excited about the future of Auckland once the new governance structure is in place.

The present governance of Auckland is messy, and it's not working. The new approach is simple, and I am confident it will work well for the whole region.

After wide consultation with Aucklanders and consideration of over 3,500 submissions, the Royal Commission concluded that the complex structure of local government was hampering the region's development.

It's easy to see how they arrived at that conclusion - duplication of facilities, competing leadership, complex and fragmented decision-making processes and weak accountability have been the hallmarks of the current arrangements.

The creation of a single Auckland Council was the Royal Commission's key proposal, and ratepayers have much to gain from this simplified governance structure.

The current seven mayors and regional council chair will be replaced with one Mayor for Auckland, elected ‘at large' by the region's residents and ratepayers.

There will be 20 Auckland Councillors - the current proposal is to have 8 elected at large and 12 elected from wards.

Auckland's future depends on critical decisions being taken at a regional level.

Our view is that region-wide decision-making must have region-wide governance arrangements to overcome the competing interests, parochialism and factionalism that has held the region back from too long.

The single unitary authority, the Auckland Council, is designed to overcome that.

These issues are also important in the way councillors are to be elected.

The Royal Commission recommended that 10 councillors should be elected from local areas or wards, and 10 elected across the whole region, or "at large".

The rationale is simple - if all councillors were elected from wards, there is a risk that the new council would recreate all the parochialism and competing self-interests evident in the current structure.

Councillors elected at large will have a strong mandate to make decisions in the broader interest of the region.

The government supported the Royal Commission's recommendation on this, but chose to shift the balance in favour of local communities through having 12 people elected from wards and 8 elected at large.

People will be able to make submissions on this issue when it goes to select committee, but it is important to understand the rationale for not having all councillors elected via wards.

We have also enhanced the Royal Commission's recommendations on community representation.

In most cases, the communities people identify with are smaller than existing councils, and this needs to be reflected in the structure of local representation.

Just as region-wide issues need region-wide solutions, the functions that are best performed at the local level should have local advocacy and decision-making.

To ensure strong community representation, we will create 20-30 Local Boards, to develop local policies and advocate to the council for community needs.

Work is underway to determine what statutory roles and functions these local boards will have.

Work is also underway to ensure that the local boards have a strong relationship with the council, through the ward and ‘at large' councillors.

With these changes we can create more engaged communities, improved connections across the region, and better value for ratepayers' money.

The new structure will allow Auckland's civic leaders to think regionally, plan strategically, and act decisively.

It will enable Auckland to become the world-class city it should be.

Over the next few weeks the Prime Minister, Associate Local Government Minister John Carter, and I will continue to actively engage with the people of Auckland, with mayors, and with businesses to hear their thoughts and ideas.

I will shortly introduce legislation to create a transition board to manage the move to the new structures.

And I will soon be making appointments to that board.

Ministers will continue to make decisions in the next few months and there will be further legislation introduced this year.

The transition will largely be completed by October 2010.

I have to say that I am thoroughly enjoying my role as Minister of Local Government.

I've got three clear goals for what I want to achieve.

Firstly, I want to keep rate rises down and encourage councils to focus on core activities.

On the necessities, not the luxuries. On rubbish removal, water supply, roads, and parks.

Secondly, I want greater transparency and accountability in local government.

Right now, council processes are murky and confusing, and that needs to change.

My third aim is to cut the red tape that's driving everyone crazy.

I want to see fewer of the absurd compliance demands in the regulatory area. And I want to reduce the financial burden placed by central government on local government.

I am working with my colleagues on streamlining both the Resource Management Act 1991 and the Building Act 2004.

These changes will help to simplify consent processes and reduce costs and delays for councils and ratepayers.

I would like to see legal responsibility - and liability - taken away from councils and placed back where it should be, on industry and on individual contractors or suppliers.

They have the expertise and incentives to manage it properly.

It's appropriate that councils are stringent and demanding in many areas involving safety and reliability of structures.

And there should be a desire to continually improve our communities. But it's gone too far and it's got to stop.

I'm really enjoying getting out around the country and meeting with councils.

Many have expressed concerns to me about the current long-term council community plan process.

The concerns include:

* the cost of preparing and auditing LTCCPs

* the "submission fatigue" ratepayers are suffering from over-consultation

* the way the community outcomes process is being used to extend councils' roles beyond core services, and

* the way that the consultation processes are unduly increasing the influence of pressure groups.

While the Local Government Act 2002 emphasises the need for transparency and accountability in local government, in practice few new mechanisms have been introduced to apply those principles.

The transparency principle has resulted in a lot more information being disclosed, but arguably without sufficient attention being paid to its relevance and usefulness.

The Department of Internal Affairs is monitoring the draft LTCCPs that are being released, and I am expecting a briefing shortly that identifies the major trends in the sector.

I am also focusing on council decision-making, transparency, accountability and financial management.

As I've got around the country, I've been impressed by the innovation I've seen in local government, like the Whangarei District Council's initiative to cut roading costs.

The design and contract model that the Whangarei District Council has developed is a good example of achieving savings and reducing costs for ratepayers by thinking outside the square.

Councils can also improve efficiency and outcomes using other methods, like entering into shared service agreements.

The shared service department of the Rangitikei District Council and Manawatu District Council is a good example of rural districts collaborating to provide core services to ratepayers where required.

Since I became Minister of Local Government, I have received hundreds of letters from concerned ratepayers about the cost of rates and council services.

It's my job to ensure that local government delivers better value for money to ratepayers and that we get rates under control.

In the current economic climate it is particularly important for councils to exercise financial prudence and spend ratepayers' money wisely. We need to constantly remember that it is ratepayers who are paying for everything.

There needs to be clarity about the impact costs will have on ratepayers for there to be a true mandate for councils' actions.

The Local Government Act is long overdue for review, so that's on my agenda along with the RMA and Building Act.

The Local Government Act is responsible for a lot of the foolishness and waste by councils.

Far too many new obligations, with associated costs, have been passed on to local government - which in turn passes them on to ratepayers, or anyone applying for a building or resource consent.

However, while these pieces of legislation are responsible for many of the absurdities, councils themselves must bear part of the blame.

Councils have become very risk-averse and over zealous.

In particular, the way councils interpret legislation - and extend the ridiculous controls into micro areas of a project.

Costs, charges and fees keep being raised way beyond what is reasonable or justifiable.

Three thousand dollars for a consent to build a ten thousand dollar Skyline garage is absurd.

The paperwork's gone crazy too.

Up to fifty pages of paperwork is needed for councils to approve a garage - whereas two or three used to be enough.

Make no mistake - I accept councils do a lot of good work.

But we cannot have them becoming a block on growth.

We are in a very tough situation economically and we must do everything we can to help businesses flourish and grow.

Thank you.

ENDS

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