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Speech to Labour Local Government Sector Council

Hon Sandra Lee
Minister of Local Government

News Release
Speech to Labour Local Government Sector Council
Labour Caucus Room, Parliament Buildings, Wellington

Embargoed until 1.30pm 12 May 2000

Thank you for inviting me to speak with you this afternoon.
Some of you may share a previous involvement like my own in local body politics.

We toil away in this unglamorous but vitally important policy area often as a labour of love. But our consolation is that all New Zealanders will share in the ultimate reward of enhancing and expanding local democracy.

I'd like to take this opportunity to discuss where we are at as a Government in advancing some of the initiatives common to our respective local government manifesto statements. I will also discuss some of the issues that will have to be addressed in moving these policies forward.

Consultation, of the “we talk, you listen” variety, that local government came to expect during past decade is not part of our agenda. We want to be successful in implementing policies important to the future wellbeing of this country by enlisting the support of local authorities.

We want to jointly develop and implement a policy programme that will be of benefit to us all.
The local government-central government Forum held in March at Premier House was an important first step in establishing this partnership and mutual trust.

As you will all no doubt be aware, the Forum initiative was a specific pre-election commitment of the Prime Minister, and, as you will have gathered by now, one that the Alliance fully supports.

The historical significance of the inaugural Forum should not be underestimated.

This was the first time that representatives from Local Government New Zealand’s National Council met in formal session with the Prime Minister and her Cabinet colleagues, on major sector issues.

The Forum discussed the development of a joint strategic local government policy framework that in itself is a very significant step forward.

Forum members also agreed, at that meeting, on a raft of issues that need to be progressed between now and the next meeting in about five months time, when progress will be assessed.

In summary, the inaugural Forum has agreed to address the following issues as a matter of shared importance:
 economic development
 community development
 social cohesion and housing
 environment
 roading and transport
 the Treaty of Waitangi
 local government legislation; (and)
 financial frameworks.

I would like to focus on two of those areas today:

 Our review of the Local Government Act (and)
 Local Government and the Treaty of Waitangi

Reviewing the Local Government Act

The Local Government Act is a good starting point to discuss some of our proposed reforms.

The Act has been around for over 25-years, and not surprisingly, its age is beginning to show. Like its predecessors, the Act is in many respects highly prescriptive. It sets out to tell local authorities what they may do and how they may do it.

Such is its level of inflexibility that successive governments have found it necessary to make more than 150 amendments to it since enactment in 1974. Not a record that anyone should feel particularly comfortable about.

As you know, I recently had to apply the provisions of the Act in relation to Rodney District Council and this exercise revealed some important flaws in the legislation. I have real sympathy for local government practitioners that have to use the Local Government Act in their day to day work. How is any body supposed to easily apply legislation that is over 700 pages long and includes section references as complicated as 707ZZZZH?

In short the present Local Government Act
 lacks coherence
 it is confusing to use
 it has become in many respects out-dated (and)
 it is needlessly detailed and, as a consequence, is expensive and difficult to administer.

Both local and central government agree that a review of the Act is well overdue.

We also agree that whatever replaces it
 should be empowering rather than prescriptive
 should ensure high levels of transparency (and)
 should ensure strong accountability to local communities.

For want of a better phrase - some form of "power of general competence".

That is the easy part. Unfortunately there is no single universally accepted formula for defining a "power of general competence".

In this respect it is similar to Tino Rangatiratanga. Ask one person what Tino Rangatiratanga means you will get one answer. Ask another person and you may get a completely different answer. The term 'power of general competence' is like that.

In the local authority context, the phrase refers to legislation that contains a broadly expressed set of empowering provisions, underpinned by requirements for higher standards of transparency and accountability.

This is in sharp contrast to the detail and the prescriptive powers, that characterise the current Local Government Act.
Of course it is possible for a more modest rationalisation of the Local Government Act to be undertaken. The outcome would be a more integrated and modern statute without necessarily making any major movement towards giving local authorities the Power of General Competence.

The options for the reform of the Act then span a broad spectrum. At one end is a legislative regime based on a modernisation of the existing very prescriptive statute. At the other end of the spectrum is the option of effectively empowering local authorities to undertake pretty much whatever functions they choose.

Despite all the good intentions of legislators over the years, the actual level of direct engagement between electors and their councils still leaves something to be desired.

One of the big benefits of the amalgamation of local authorities 10 years ago was supposed to be greater participation by electors in the local democratic process. I feel we have a long way to go.

Public participation in many of these consultative processes can be very low indeed as demonstrated after a recent ring-around of seven of our 12 regional councils.

The number of submissions received on the most recent annual planning round ranged between a high of 120 and a low of 23. That's a better-than-usual low figure because the average low in recent years has been 10.

When considered in conjunction with the relatively low voter turnout figures for local authorities, it becomes clear that greater levels of accountability and public participation are central to the Power of General Competence equation.

Just what, if any, level of understanding the vast majority of electors and ratepayers have of this concept is not known, at this stage - although in all likelihood, it is probably very little. Certainly it is by no means clear that there is significant public support for the proposal. The prospect of greater power and independence being bestowed on local government will almost certainly provoke a mixed reaction in the community.

Before the Government could consider giving local authorities the Power of General Competence, there must be a far greater level of sign-up from those who, at the end of the day, pay the bills.

The debate on the issue must therefore be widened to ensure that the community has an understanding of the issues, and real opportunity to participate in any further development of the concept. So, where to from here?

It was agreed at the Forum in March that central and local government would work to identify a framework that could serve as the basis for the development of the relationship over a range of agreed issues. The review of local government legislation was identified as one such issue.

Local Government New Zealand has established a working group to further develop the sectors thinking on a review of the Act. Work is also being undertaken within Government to consider the appropriate principles over the coming months.

The intention is to bring these two perspectives together in preparation for the next Forum meeting in October. All going well I would hope to have a Bill ready for introduction in the second half of next year.

Local Government and the Treaty

In recent years a considerable amount of effort and energy has been channelled into work to accurately define the Treaty relationship between the tangata whenua and the Crown. The relationship between local government and Maori has fallen largely outside this process in recent years.

However, the change of government has provided the momentum for a raft of intensive policy work to commence on the issue.

This is consistent with the Government's Closing the Gaps strategy.

A wide range of statutes and regulations impinge on the constitution and governance of local authorities, or confer functions or impose obligations on them. Few directly acknowledge the Treaty or place any direct Treaty-related obligations on local government. The obvious exception to this is the Resource Management Act.

However more than 100 statutes and regulations deal with issues which impact on areas of particular interest to Maori, and which actually or potentially raise Treaty issues.

Rating is an obvious case. Local authority rates are a subject of longstanding concern to Maori.

Historically, rating (or more specifically the sale of land for the non-payment of rates) has been a significant instrument of alienation of Maori Land.

Provisions for rating sales of Maori land were dropped when the current Rating Powers Act was enacted in 1988. But rating still touches on the land and the position of Maori as citizens of New Zealand.

What we don’t have at the moment is a complete overview of the whole of the body of local government-related legislation and its relationship to the Crown’s obligations under the Treaty.

While a lot of research has been carried out over the years this has tended to be fairly ad hoc and to focus on specific issues, particularly around the Resource Management Act. What we need to do is to pull this research together, fill in the gaps, and look at it from the perspective of the body of legislation governing the sector as a whole.
Part of the work I have requested officials to commence is to develop this overview.

This background work is vital to clarifying how the Government can best approach implementing its policy on local government and the Treaty.

There are clear reasons why the current situation is not satisfactory.

From the Maori perspective -

 We Maori want the Treaty upheld. We do not believe the Crown's obligations are lessened by the fact that some functions rest with central government and others with local government. Treaty obligations should not go down some sort of ‘black hole” in relation to an issue because it is dealt with by local rather than central government.

 We Maori do not want to have to be legal experts to know what the obligations of our local authorities are in relation to any particular activity or function. Obviously, there may be some Treaty obligations under one Act, but no Treaty obligations under another.

I suspect most people involved in local government do want to do “the right thing” in relation to the Treaty. What they are struggling with is to identify what “the right thing” is.

Recent publicity of discussions by individual local authorities on proposals for improving Maori representation has rather demonstrated the point.

Faced with this uncertainty, many local authorities have tended to take the safe course by doing the minimum the legislation requires, or what some Court decision has spelt out as the necessary minimum.

A recently published piece of research, funded by the Foundation for Research Science and Technology, sought to identify local authority perceptions of what their obligations under the Treaty were.

The reported perceptions of local authorities as to the nature and extent of their Treaty obligations varied widely, and as a consequence most local authorities tended to manage what they perceived as a “risk” by acting conservatively.

I do not think that situation is satisfactory or sustainable.

I think that it is the Crown’s responsibility in promoting local government legislation to act in good faith and in accordance with its own obligations under the Treaty, in the same way it does when it promotes legislation relating to the activities of central government.

This means including provision to formally acknowledge the Treaty and provide a mechanism to address issues arising from it.

While the precise content of such provision would be subject to debate, I believe that we can and should move to a position where:
 the Crown as legislator of the rules for local government acknowledges its obligations under the Treaty;
 local authorities are given proper legislative guidance as to what the Crown expects of them in terms of acting consistently with the Treaty;
 Maori are given a clear basis for dealing with local authorities which appropriately acknowledges the Treaty.

Clearly it would be naïve of me to imagine that moving on these issues will not be controversial.

I believe, however, that in local government, as in central government, we must urgently address these issues to begin building healthy and sustainable relationships in our communities for the long term. This will be one of my key priorities for the portfolio over the coming year.

The two closely related issues of Maori representation on local authorities and increased Maori participation in local government decision-making are also to be addressed by this Government.

It was agreed at the central-local government Forum in March that the Local Elections and Polls Act should be up-dated and that the resulting legislation enacted in time for next year’s local authority elections, if at all possible.

Policy crunching on this issue has been under way for some time by a working party comprising the Society of Local Government Managers, Local Government New Zealand and officials from the Department of Internal Affairs.

The working party is developing a principles based re-work of the Local Elections and Polls Act. This re-work includes technical changes to improve the conduct of elections and to enable technological advances to be adopted where appropriate. The review also addresses such issues as dual membership on local authorities and limits on campaign spending.

The Review is timely in that it also provides a useful opportunity to consider two issues of particular relevance to Maori.

One issue of significance is the proposed introduction of an optional Single Transferable Voting system, which I think more people would relate to if we described it publicly as a Kiwi version of Australia's preferential voting system.

The other major issue is the development of policy in relation to separate Maori local authority constituencies. I acknowledge that this is a complicated issue and it will not be able to be addressed at the same time as STV.

Because both these issues also have significant implications for the triennial review process, which is already under way, it is simply not practicable to attempt to have either initiative up and running for next year’s local authority elections. STV will be incorporated in the Local Government Electoral Law Bill but the provisions will not take effect until the local government elections in 2004.

The question of separate Maori constituencies is of particular sensitivity.
I am only too well aware that community attitudes to this issue are likely to be somewhat divided.

As a Government we have a responsibility to show leadership on this issue, but any changes we propose will benefit from careful consideration and a thorough consultative process.

I understand that the Bay of Plenty Regional Council intends promoting a Maori Constituencies Empowering Bill, possibly later this term. Should it do so I will be most interested in the ensuing debate. No doubt it will be useful to our policy development process on the Maori constituencies issue.

I was pleased to have the opportunity to speak to you this afternoon.

All of us here recognise the critical importance of local government as a partner in the governance of New Zealand. After all, in many ways local government impacts on the daily lives of all those in our communities, more so than central government, I feel.

We have much to debate and discuss and I look forward to your participation in this.

Thank you again for inviting me here.


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