Hon John Key
Opening address to Local Government New Zealand Annual Conference
Thank you for inviting me to open your conference, it’s a pleasure to be back
I’d like to start today by thanking you all for your hard work and dedication.
The work you do shapes the future of our communities, our cities and towns, and our country. You are doing an excellent
I’d particularly like to acknowledge your hard-working President, Lawrence Yule, who I meet with regularly and enjoy
A special thank you, also, to Local Government Minister Rodney Hide for his leadership. Rodney is passionate about his
role and he has done an outstanding job – especially in Auckland and in promoting transparency, accountability, and
getting better value for ratepayer money.
Thank you Rodney.
It’s been a busy and interesting time for local government since I spoke with you at last year’s conference.
A lot of focus has been on the Auckland region, but my Government is enjoying working closely with mayors and councils
up and down the country.
We value the relationships we have with you and we know how important it is that we work well with you.
In fact it is vital – because central and local government are a huge part of New Zealand’s economy. I want to give you
an idea of how significant central and local government are in the economy.
In 2009, central government consumption made up around 21 per cent of the economy. That's actual spending by the
government on goods and services, not including transfer payments or spending by SOEs.
Local government spending contributed another 5 per cent of GDP.
So just over a quarter of all spending in the New Zealand economy is from central and local government.
That proportion has been growing over recent years. Back in 2004, for example, central government consumption was 17 per
cent of GDP and local government was 4 per cent.
People will always debate whether central and local government should be as big as they are. And there will always be
differing views about the appropriate size relative to the private sector.
But central and local government will always be a large part of New Zealand’s economy.
They are also an enabling force for the private sector to generate jobs and economic growth.
So what we do in central and local government is crucial for the future of this country. It’s crucial for our cities,
our towns, our communities, and our people.
Today I want to talk about how local and central government can work together to make New Zealand an even better place.
I’ll talk about areas where we already are working well together, and where we can do more in the future.
The National-led Government was elected to put New Zealand on a higher growth path and that is precisely what we are
going to do.
We are determined to lift the long-term performance of the New Zealand economy.
Growing the economy is the only way we will create jobs, boost incomes, raise living standards, and provide the
world-class public services that Kiwi families deserve.
Boosting growth is a challenge – after all, catching Australia doesn’t mean we just need to grow as fast as they do. We
have to do even better than our cousins across the Tasman.
My Government has a six-point plan to get New Zealand’s economy growing faster. The key drivers of it are:
• Changes to the tax system to make it fairer, so that hard work and enterprise are rewarded.
• Demanding better, smarter public services.
• A multi-billion dollar investment in infrastructure.
• Cutting red tape and regulation.
• Better business innovation and an ambitious trade agenda.
• And improving education and skills.
Underpinning all this is a disciplined fiscal policy. We will maintain firm control of the government’s finances, so we
can return to Budget surpluses and keep debt tightly under control.
You, in local government, can also contribute significantly to economic growth.
As we look to improve infrastructure and go for growth, we’re conscious of the role that local government also has to
In the case of the Resource Management Act, for example, you know that within 12 months of being elected we changed the
Act. The RMA overhaul will reduce costs, delays, and uncertainties.
But while we changed the Act – it’s up to you to implement it.
I know that the actions of central government have a direct impact on local government. Sometimes that can mean
increased costs, as we’ve seen in the past.
But our progress in reducing red tape, reforming the Resource Management Act and investing in infrastructure will make a
positive difference for you.
Our investment in infrastructure will bring benefits to communities all over New Zealand, as we put billions of dollars
towards building and upgrading schools, roads, housing, hospitals and telecommunications.
That includes rolling out ultra-fast broadband, and I’d like to acknowledge the work local authorities have done with us
on that project.
We are reviewing regulations such as the Building Act.
There are also changes underway to the planning, decision making, and accountability aspects of the Local Government
Act, because we want to improve the transparency, accountability, and financial management of councils.
The Local Government Amendment Bill has three underlying principles:
• Local government should operate within a defined fiscal envelope.
• Councils should focus on core activities – such as waste collection, transport, and water supply.
• And council decision making should be clear, transparent and accountable.
So as you can see, there’s a lot of hard work going on to unclog the arteries of growth in New Zealand and to make it
easier for you to do your job. I know that when central and local government work together, we can make real progress.
As a government we are now looking at phase two of our RMA reforms in some very specific areas.
The phase two reforms are critical to achieving our aims of growing the economy while protecting the environment.
One of the areas we are moving on is aquaculture.
We want to free up the regulatory bottlenecks that have kept aquaculture planning in limbo.
Fisheries Minister Phil Heatley took another step on the path towards much-needed reform when he released policy in this
area last week.
We support the industry’s goal of generating annual sales of $1 billion by 2025, and I’m pleased that we’re on track to
put in place the regulations to help the industry to reach that goal.
Another aspect of the phase two RMA reforms is the important issue of water reform.
The Land and Water Forum will soon deliver its report to the Government, recommending long-term strategies for
freshwater in New Zealand.
Improving freshwater management is one of our key environmental priorities and I’m pleased that the forum’s
collaborative approach is trying to achieve the best outcomes for the community, the environment and the economy.
Better freshwater management is crucial to the development of the New Zealand economy, so it’s an important part of our
phase two programme.
Environment Minister Nick Smith is also progressing the development of the expanded Environmental Protection Authority,
with legislation due in Parliament later this year.
And there is much more to our phase two RMA reforms, including issues relating to infrastructure and urban design.
I won’t go into all of it in detail today, but I think you can get the sense that we have a very important programme of
reform underway in this area.
There is a lot ahead of us.
I think it’s also worth reflecting on some good examples of how we are already working well together – like firstly, to
fix leaky homes.
When we came into office we recognised the significance of the leaky home problem
There are tens of thousands of leaky homes in New Zealand and many people in your communities are affected.
We also recognised the impact the problem could have on rates if local government was forced to go it alone.
We were not willing to leave you in that position.
So in May we announced our financial assistance package, in which central government, local authorities, and affected
homeowners will share the cost of the repairs.
I’m delighted with the support local authorities have given to our package. So far 28 councils are on board, including
the eight most affected.
We hope to have the package in place early next year.
Second, we are working constructively with local authorities to make the Rugby World Cup 2011 a huge success next year.
We’ve had a few issues to work our way through, such as plans for Party Central on Queen’s Wharf in Auckland. But I’m
confident we will get there in the end and that the result will be something we can be proud of.
And we all agree on one thing – the Rugby World Cup represents a huge opportunity that we simply cannot afford to miss.
As Tourism Minister, the enormous potential of this event is clear to me. We’re expecting 85,000 visitors, and billions
more will be watching from home.
It’s a unique chance to showcase the very best we have to offer the world.
It is a sign of New Zealand’s attractiveness as a destination that our visitor numbers held up during the worst global
financial and economic crisis since the Great Depression.
That proves what we can do.
It’s testament to our world-class tourism industry, and the resilience of our tourism businesses.
During that time an increase in Australian tourists offset a drop from some long-haul destinations - and I’m pleased
that unprecedented growth out of Australia is continuing.
All local councils have an important role to play in helping us make sure the Rugby World Cup is a success.
In the weeks leading up to the World Cup, New Zealand will be in celebration mode, with the biggest festival ever held
There’s a fantastic regional programme and it’s great that so many communities all over the country are getting behind
it and playing their part.
I look forward to working with you as we get closer to kick off.
Third, we’re working together on the New Zealand Cycle Trail Project.
I was in Ohakune to open the first part of the Ruapehu-Whanganui trail, and it was obvious how excited people are about
it. This trail – and the others planned around the country – will showcase some of our best scenery.
The trails will be a big draw card for tourists and they’ll benefit our communities. They will also create jobs –
through design, construction, and project management, and through new businesses opening up along the routes and
downstream economic activity.
These trails would not be possible without the support of local authorities and communities throughout New Zealand.
While the government can provide leadership and some funding, the success of the cycleway depends on your support and
I’m pleased to say we have been swamped with ideas and detailed proposals.
This month we announced that work is expected to start on eight trails this summer – in Opotiki/Gisborne, Taupo, Hawke’s
Bay, Nelson/Tasman, Westport, Mount Cook/Waitaki, Queenstown, and Clutha.
I know there are people here today from those regions, so thank you for your hard work in getting these trails underway.
I look forward to seeing the progress.
I’d now like to talk about the importance of how we spend the money that we receive from taxpayers and ratepayers.
In all that we do, we need to keep improving the services we provide to our constituents at a cost that is affordable.
The year since your last conference has been a very challenging one for both central and local government.
We’ve experienced the worst economic recession since the 1930s. Families have been struggling to make ends meet and
they’ve had to be much more careful with their spending.
They expect us to be just as careful when we spend.
A lot of the money we spend is on vital public services and infrastructure that greatly benefit our communities. That
But in all the spending we do, we need to be conscious of the fact that we are spending taxpayer – or ratepayer – money.
Many ratepayers have been struggling with increases in their rates.
We need to keep looking for ways to do things better.
We need to keep working hard to get more value for money, and we need to spend every dollar carefully.
It’s worth noting here also that the world has changed in terms of the appetite for transparency around the way we spend
You cannot help but notice the news stories about how politicians spend public money
It’s clear to me that we are well down a pathway toward more openness and transparency that will not be reversed. If
anything, the appetite for information, accountability and transparency will only increase.
I’m proud that we have shown leadership in this area.
At Parliament we are now regularly publishing details of MP spending for media and the public, and I believe that is the
right thing to do.
Of course, transparency is as important as ever in election year – be it local body elections or central government
elections. Local body elections are all about grassroots democracy.
People in our local authorities are very well placed to decide what’s best for their communities, and my government is
committed to protecting and enhancing this right.
So it’s concerning to me that voter turnout at the last local body elections was only 44 per cent. That’s the lowest
turnout since the restructuring of local government in 1989.
It’s a worrying trend given the impact local councils have on people’s lives and on our communities.
It’s our local authorities that run our public libraries, art galleries, and parks. It’s our local authorities that make
sure we’re prepared for a natural disaster, administer community grants for local initiatives, and issue resource
The work you do and the services you provide make a real difference to our lives. So I will be personally advocating
very strongly for people to have their say and vote in the local body elections this October.
New Zealanders have fought for democracy and it is something to be valued. I want to encourage people to exercise their
right to vote. Because local government really matters.
It would be great to see people engaged in their communities – our communities, and New Zealand, would be better for it.
Finally today, no local government speech would be complete without talking about Auckland. The Auckland reforms began
last year and the new Auckland Council will be in place from November this year.
The reforms will simplify and streamline governance structures within the Auckland region. For example, the 850 forms
currently used by councils in the region will be reduced to 120.
Streamlining will result in better, more cost-effective public services for Aucklanders delivered through integrated
planning and service delivery across the region.
Change is always difficult, but unlocking Auckland’s potential is vital for the future of New Zealand. The new Auckland
Council will begin life with $29 billion of assets, and revenue of $3.2 billion. They are big numbers.
Auckland’s performance is critical to the overall performance of the New Zealand economy. We need this city to be
As we near the first elections for the Auckland Council, I’d like to make one more point. With change of this scale,
there are always going to be implementation risks. With any large merger there always are.
But I’m looking forward to working with whoever is elected to the new council to make sure that this is a city that
This is an exciting time for Auckland and I know we can make this a city we are even more proud of.
I anticipate there will be other regions that will, at some point, come forward to make the kind of governance changes
that we’re seeing in Auckland.
Any further changes of that type will be community-led, not central government-led.
Ladies and gentlemen.
Today I’ve outlined the reasons why it’s so vital that central and local government work well together.
Together we need to maximise our opportunities to unlock greater growth potential in all our cities and regions.
We need to work together and we need to keep improving the way we do things.
If we can do that we will be on our way to making New Zealand an even better place.
I appreciate the work you do and the challenges you face, and my government is committed to helping you.
There is a lot we are achieving together.
And there is a lot more we can do to secure a brighter future for New Zealand.
I’m confident that we are on the right track.
Have a great conference.