Local Government (Auckland Law Reform) Bill – Mike Lee and Peter Winder’s speech notes

1 March 2010

ARC Chairman Mike Lee and Chief Executive Peter Winder appeared in front of the Local Government (Auckland Law Reform) Bill select committee this morning.

What follows are their speech notes.

Introduction – Mike Lee

The ARC has consistently supported the reform of Auckland’s local government structure, and from the beginning of this process has acknowledged that significant changes need to be made. The ARC commended the last Labour-led government for calling a Royal Commission to investigate changes to Auckland governance and has supported this government throughout the Super City reforms since the Royal Commission. The comments I make today need to be seen in this context. My comments will not be intended as political points-scoring because I believe the future of Auckland is too important for narrow politics. In fact it is so important that there should be a cross-party non partisan approach in parliament to completing the Super City reform process.

I had hoped to be able to sit here today say well done for making the changes needed to streamline and strengthen Auckland’s governance. Unfortunately, I am unable to say this.

According to the explanatory note to the Bill, these reforms were intended to: “create one Auckland, which has strong regional governance, integrated decision making, greater community engagement and improved value for money”.

So far, the proposals fail to do this and we are frankly very disappointed that Auckland is not getting the unified governance and decision making we thought we were going to get. Instead we will have all sorts of agencies making different decisions, a lack of unity, and a structure that lack public accountability. We essentially get three very large bureaucracies – Auckland Council, Watercare, and Auckland Transport. What we have is not unified governance at all. We have instead 3 quite separate powerful fiefdoms running Auckland – and only one democratically accountable.

Regional governance has not been strengthened. For example, the new governing body will have very few regional issues over which it will make decisions – transport, water, economic development, waterfront development, and regional facilities have all been taken out of its hands.

The proposals also will not enable Auckland to achieve integrated decision-making, nor will the Auckland Council be able to make a decision and then simply go out and implement it. For much of its business, the Auckland Council will have to work with up to 7 Council Controlled Organisations to make and implement decisions. This is no improvement over the current situation where the ARC has to work with up to 7 local councils to get decisions made and implemented.

We all know that other regions are watching Auckland’s reform process to see how something similar could apply in their own regions. I fail to see why any other region would be willing to accept arrangements similar to what you have proposed for Auckland. The arrangements will simply be unacceptable.

This is significant – my message for instance to the Wellington Region is that “if they try and fit you up with this sort of ‘Super City’ – don’t touch it with a barge pole.”

Transport Overview – Mike Lee

The area of most concern to the ARC is transport. Clearly the City’s greatest infrastructural challenge is transport on which more than half the ARC’s rates are spent – and indeed more than half rates of the city and district councils. The ARC is adamantly opposed to the creation of Auckland Transport, and believes that the proposal should be shelved.

The proposal for an Auckland Transport bureaucracy is the aspect of the Bill which is most obnoxious to us - because it is the most threatening to achieving the purpose of the reform. It means that Auckland will not have integrated decision-making, and it will prevent the region and its communities from having genuine input into transport-related decisions affecting their local areas and across the region. In short it means regional governance is not unified and strengthened, it is instead and weakened.

The transport agency will be spending over 50% of the Auckland Council’s rates revenue $1.3 billion of Aucklanders’ money, yet the arrangements proposed do not make it accountable to the public for the expenditure of that money, and nor do they make it accountable to the Auckland Council.

It is also unclear to us how members of the public, members of local boards or members of the Auckland Council will be able to influence the transport agency, or any transport projects in their local area.

The accountability arrangements for Auckland Transport fall well short of what is required. There has been some debate in the media about the inappropriateness of Auckland Transport being able to conduct its business behind closed doors, in secrecy and about the initial directors being appointed by government Ministers, but this is just the tip of the iceberg. The more significant problems are that:

The Auckland Council is unable to appoint the Chair and Deputy Chair

Auckland Transport is not required by legislation to act in accordance with the requirements of its shareholder

The Board is not made accountable to the Auckland Council

The Auckland Council may be able to make changes to Auckland Transport’s statement of intent, but the provisions in this Bill would mean that Auckland Transport is not even required to act in accordance with its statement of intent

Auckland Transport is not required to give effect to the Regional Land Transport Strategy or to any other policy of the Auckland Council that relates to the transport agency

Auckland Transport could set up companies, sell assets and enter into major financial commitments without the approval of Auckland Council, even where the transactions may leave the Council with significant liabilities or commitments

Auckland Transport won’t be required to have regard for the wider land use and development objectives of the Auckland Council.

One thing we find particularly disturbing is that management positions for Auckland Transport have already been advertised. The Auckland Transition Agency is already in the process of setting it up this bureaucracy. Yet the public has had no opportunity to voice its opinion whether its wants this body or not. The work and the deliberations of this select committee have not been completed and parliament has not yet made a final decision. And yet this is going on – clearly it’s a sign of things to come. This makes a mockery of this committee’s work – it is a disgrace.

Peter Winder

Auckland Transport will be preparing the Regional Land Transport Programme, and Auckland Council will be providing over 50% of its rates revenue for the implementation of that programme. However, the Council won’t even have decision rights on what is included in the Regional Land Transport Programme, because according to the Bill it will only be consulted if affected. The Bill also proposes that the Regional Land Transport Programme would not be required to give effect to the Regional Land Transport Strategy.

Our submission has provided a comparison of the accountability arrangements for Auckland Transport with those for crown agents. We note that the Government has significantly more control over NZTA than the Auckland Council will have over Auckland Transport, yet Auckland Transport will be around 70% of the size of NZTA. What is worrying is that the Auckland Council will have less control over Auckland Transport than the Government has over even very small crown agents such as the New Zealand Tourism Board or the Health Research Council of New Zealand.

The Government would not tolerate such weak accountability for its own crown agents, so why should the Auckland Council tolerate them? Especially for an agency that it will be expected to hand over more than half of its revenue to every year.

You have also added a schedule which sets out procedures and rules that would take the place of a constitution for Auckland Transport. Some of the provisions come directly from the Crown Entities Act, but crucial accountability mechanisms are not included. It should really be up to the Auckland Council to agree rules and procedures for Auckland Transport, rather than being set in legislation and therefore we suggest that this schedule be removed.

Regional Boundaries – Mike Lee

The ARC has been consistently opposed to the proposed reductions to the geographic area of the Auckland region. We continue to oppose the requirement for a large area of the Hunua ranges, including the Mangatangi and Mangatawhiri dams, to become part of the Waikato region.

I am aware that there has been a lot of discussion recently about the northern boundary. However, the ARC would be strongly opposed to any change that would remove the northern area from the Auckland region. If Greater Auckland was reduced in size by approximately one quarter as some people would like – the whole ‘Super City process’ would be deeply compromised.

If the Auckland Council is to be able to influence land use and transport outcomes, it will be absolutely necessary for it to have governance over Auckland’s rural and urban areas.

To be honest, if any area of Auckland could run an argument that they shouldn’t be part of the super city right now, they would probably do so, given that it is clear that there will be very little accountability to ratepayers. I think this is what is happening in Rodney. I think the reason you haven’t had petitions from other parts of the region is simply that it seems less likely that they have any chance of being excluded from the super city. The historic boundaries of Greater Auckland should be retained.

Constraining the Council – Mike Lee

One of the principles agreed by Cabinet to guide this reform was that existing local government legislation should be relied upon wherever possible. However, this Bill includes many needless inconsistencies with general local government legislation and is riddled with ‘Auckland exceptionalism’. To pull out just a few examples:

Auckland is required to have CCOs for transport, water and waterfront development, removing the right of elected members in Auckland to determine how local government services are delivered in Auckland

The Auckland Council’s CCOs have special legislative provisions rather than relying on the general provisions in the Local Government Act, for example, there is a prohibition on councillors being appointed as CCO directors – but only in Auckland

Auckland Council will be required to prepare a spatial plan

The Auckland Council is unable to review the number of elected representatives through the normal process in the Local Electoral Act

The Auckland Council and members of the public are prevented from influencing the electoral system to be used in 2013.

We question the need for any of these provisions. Our experience is that Auckland-specific provisions usually become quickly outdated or are found to be relatively unworkable, and that it is difficult and time-consuming to get amendments made.

Peter Winder

Another obvious constraint on the Council is the retention of the Auckland Regional Amenities Funding Act. The Act was developed as a response to the region’s governance structure, because some territorial authorities were supporting regional arts, culture and rescue organisations, while others refused to do so, despite the fact that residents from all parts of the region benefitted from having these organisations.

The creation of the Auckland Council solves this problem and the Auckland Regional Amenities Funding Act should therefore be repealed. The Council should be able to choose which regional amenities it supports, the amount it provides to those organisations and the mechanism by which funding is provided.

The Bill proposes that the Auckland Regional Amenities Funding Board be able to levy the Auckland Council for any amount it chooses every year to support a group of 10 organisations. Despite the worthy nature of those organisations and the substantial contribution that they make to the social and cultural fabric of Auckland, this is completely unacceptable because it amounts to taxation without representation.

Strategic Assets – Mike Lee

I know you have heard a lot of concern from members of the public fearful about the potential sale of port and airport shares. Given the other anti-democratic measures being put into this structure – who can blame them. We have two major concerns about strategic assets.

First, when councils want to sell strategic assets, such as ports or airport shares, they are required to consult the public first. When a CCO wants to sell strategic assets, it is not required to do so. If these assets are put into a CCO, you will have removed the right of the public to have a say. Therefore we recommend you amend the Local Government Act to require public consultation before strategic assets are sold by CCOs.

Secondly, by repealing the Local Government (Auckland) Amendment Act, you have removed the requirement for a poll to be held before the sale of shares in the Ports of Auckland. We recommend that the requirement for a poll be retained, and written into this Bill.

We also note that the Auckland Council would have no mechanism to stop Auckland Transport from selling public assets such as rolling stock, even though they have been funded by ratepayers.

People are concerned about ‘Rogernomics’ – they may well be right – I am more fearful of its unfortunate offspring ‘Rogerpolitics’ - the diminution of democracy and accountability.

Employment Provisions – Peter Winder

I am particularly concerned about the provisions relating to the transfer of staff. The Bill does not reflect the Cabinet decision that staff should be transferred on their existing terms and conditions, unless otherwise agreed.

As currently drafted, the provisions allow the Auckland Council’s interim chief executive to transfer staff to a new employer on 1 November 2010 on different terms and conditions, without the agreement of the employee. The interim chief executive is also empowered to unilaterally impose different terms and conditions.

Ideally the provisions would be completely rewritten or they would be removed and the Employment Relations Act would be relied on instead, with one technical clause so that transfers to new organisations do not trigger technical redundancies.

However, if the provisions are substantially changed at this stage, staff will have no opportunity for further input and this would not be satisfactory. Therefore, our submission suggests a mechanism by which the provisions in the Bill could be redrafted so that terms and conditions can only be changed where the changes are agreed by both parties.

Auckland Centennial Memorial Park – Mike Lee

The ARC is opposed to the provision in the Bill that repeals section 77 of the Local Government Amendment Act 1992, which required the ARC to continue to hold the Auckland Centennial Memorial Park, which is part of the Waitakere Ranges.

I know that Ministers have stated that this was a mere technical amendment that was made erroneously, but I find it interesting that this emerged at the same time that I received a letter from the Minister of Treaty of Waitangi Negotiations stating that he was looking to use the Centennial Memorial Park in Waitakere Ranges in Auckland Treaty settlements.

The park has its own special history going back to 1940 when proud Aucklanders were seeking to celebrate the 100th birthday of New Zealand as a united modern country. Aucklanders bought and donated land to create the park which is now a key part of the Waitakere Ranges Regional parkland. It is well loved by Aucklanders and I’m sure you have heard that there is a high degree of support for continued regional ownership of the Waitakere Ranges. And could I point out Auckland’s regional park network is one of the most popular aspects of local government in the whole of New Zealand. We therefore suggest that the provision requiring ARC to continue to hold the park be retained, and that the reference to “ARC” simply be replaced with a reference to “the Auckland Council”.

Conclusion – Mike Lee

I reiterate again that the ARC has supported the Super City reform from the start. This Bill is critical for the future of Auckland, and it yet has profound flaws. The original intention of the Auckland governance reform process is being (and I can’t think of another word) subverted. This Bill is not constructing unity in Auckland, nor is it strengthening governance, nor increasing efficiency nor increasing public accountability, and definitely not strengthening democracy. The select committee now has the opportunity to make the necessary changes to address these issues. I urge you to take that opportunity and act in the best interests of Auckland. To fail to do so would be to condemn Auckland to a governance structure which will be unaccountable, inefficient and highly unpopular.

I would go far as to say that if the Super City is based on this Bill the way it is now then I will predict the Super City will not survive – it will not stand.

ENDS

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