Hon. Sandra Lee
Monday 10 July 2000 Speech Notes
Keynote address to 2000 Local Government NZ annual conference, Christchurch
(Please check against delivery)

Local Government New Zealand President Louise Rosson, Vice Presidents Phil Warren and Gordon Blake, conference delegates – It’s a pleasure to be here with you this afternoon.

I guess the thing I like the most about these conferences, and I’ve been to a few of them in my time, is that they are, in effect, a celebration of local government - what it is, what it stands for, and the place that it occupies within our society.

The theme of this year’s Conference, “Future Focus – Fighting Fit” expresses that sentiment very well I think.

What binds us all together is not so much our shared experience of local government, significant as that might be, but our recognition of the as yet unfulfilled promise and opportunities that lie ahead for this sector.

As a representative of the Labour-Alliance coalition, I can tell you that this government shares in that understanding, and with your help, we expect to do much to add to the depth and significance of the sector over the coming years.

I’d like to start off this afternoon with a few comments about democracy.

Sometimes I suspect we fall into the trap in this country of taking our democratic institutions for granted, and to some extent, that can be viewed as a positive. It suggests that, as a people, we have an underlying respect for and confidence in the nature of those institutions.

To all of us here today, I would suspect, democracy is a given – a non-tradeable commodity – and so it should be.

However, recent events in the South Pacific demonstrate just how fragile democratic institutions can be. Democracy may well be firmly entrenched in this society, but it should never be taken for granted.

If democracy is to flourish it must be nurtured, sustained and where necessary defended – something that past generations of New Zealanders came to understand only too well.

As elected representatives we have a greater duty than most when it comes to the care and nurture of those institutions.

If public confidence in them is to be maintained we must ensure that they remain relevant, inclusive and representative, both for individuals and for the communities to which they belong.

Central government electoral processes, as we all know, have recently been through a reasonably profound shake-up, and although the ride has certainly been bumpy, and a few detractors remain, I personally doubt that a majority of electors would really want to take us back into the past.

Whatever one might think of MMP, few could deny that it is a more representative form of democracy than the system it replaced. I’ll spend a little more time on the issue of local authority electoral processes in a few minutes.

I believe our communities are, overall, very well served by their local authority elected members.

I have yet to meet a district, city or regional councillor, or community board member, who was not deeply committed to the service of his or her local community.

Having said that, I believe the sector still faces a number of very significant challenges.

Broadly speaking only about half of all eligible voters participate in the local authority elections.

Given the considerable impact that local authorities have on our day to day lives, that seems to me quite astounding. More particularly so, when one considers the relative ease of our current postal voting system.

The extent of the public’s involvement in the local authority annual planning cycle provides further food for thought.

In the 1999/2000 financial year 26 of our 86 territorial and regional authorities received fewer than fifty written submissions on their draft annual plans. In about a third of those cases the number of submissions received numbered less than twenty-five.

Should this be interpreted as a vote of confidence in our system of local government or, on the other hand, are people simply unaware of local government or worse, apathetic?

The answer to this question is unlikely to be straightforward but it is something you should be asking yourselves.

I’m sure you will agree that the profile of local government needs to be lifted. The challenge for everyone in the sector is how to make more people aware of what it is that you do, or propose to do on their behalf, and once aware, actually get them to participate in it.

I’m not suggesting for one minute that that will be an easy task – it won’t.

Stimulating people’s interest in the day to day business of local government has never been a simple matter. But it shouldn’t necessarily be an unattainable objective either.

To be successful our democratic institutions require public participation, notwithstanding that, on occasion, that participation may bring us face to face with questions and arguments that we do not necessarily want to hear.

We should never assume that silence necessarily signifies agreement, nor should we blame the public if they fail to wholeheartedly embrace the systems and processes that we have so carefully put in place for them.

If your communities appear unwilling to come to the party, it is up to you to find out why, and what can be done to ensure that they do. If it turns out that legislation is part of that answer, then I would expect you to come knocking on my door.

This Government has a vested interest in the way local government performs, and I don’t mean that from an economic standpoint, important as that is.

Both coalition partners are agreed that our success as a Government hinges in many respects on our ability to forge a close and productive working relationship with the local government sector.

That understanding underpinned the Prime Minister’s pre-election pledge to establish and chair a forum at the very highest level between local and central government, to develop a joint approach to the numerous social policy issues that we face as a country.

The inaugural forum meeting was held in March of this year at Premier House and involved members of your National Council, the Prime Minister, key Government Ministers and senior officials.

The Forum agreed to the development of a joint strategic policy framework for Local Government – essentially a set of broad over-arching principles as to what local government is all about, and a list of issues that local and central government agree as matters of “shared importance”. That list comprises:

 Economic development;
 Community development;
 Social cohesion and housing;
 Environment;
 Roading and transport;
 The Treaty of Waitangi;
 Local government legislation; and
 Financial frameworks.

The Forum has three long-term goals:

 To identify key issues of significance to either or both partners and agree priorities for addressing them;
 To identify issues of common interest and explore opportunities for jointly resolving them;
 To give and receive feedback on the contribution of each sector on matters of shared national and local importance.

The Prime Minister will be talking to you further on these issues tomorrow afternoon.

It is my firm belief that we are about to enter a new era of understanding and partnership between our two sectors. That partnership is, of course, unlikely to be cemented overnight.

Relationships of any sort require constant work and attention. Trust between partners must be earned. That is something I think we all understand.

Talking the talk and walking the walk are quite clearly two different things however.

In the past, more often than not, so-called partnership arrangements between central and local government have been somewhat disappointing, and some of you will no doubt view the idea with a measure of cynicism.

As a Government we are only too well aware that it is what you do, not what you say, that really counts in the end. We are quite happy to be judged on that basis.

There are already a number of indicators out there that should suggest to you that this Government is taking its relationship with the sector very seriously indeed.

My colleague Jim Anderton, the Minister for Economic Development, has clearly signalled his commitment to a partnership with local government in the work he is doing in the field of regional and economic development.

Industry New Zealand and the Ministry of Economic Development have been established with the specific goal of helping to foster that partnership relationship with local communities.

$332m has been provided in the Budget over the next four years to support advice and practical assistance programmes for this regional development work.

The objective, quite simply, is more jobs and better incomes for all New Zealanders.

We recognise only too well that the answers to the problems we face as a country are more likely to eventuate through collaborative action.

Local government is closer to the problems than we are up in Wellington. You know far more accurately than we do, the particular strengths and weaknesses of the districts, cities and regions that you represent.

The Government’s role, in addition to the provision of capital assistance and expertise, is to ensure that local government has the space and flexibility it needs to undertake the initiatives and actions it deems most appropriate for the communities it represents.

You will no doubt also be aware that the Prime Minister and a number of her Cabinet colleagues (including me) met recently with the Auckland Mayoral Form to discuss the possibilities that exist for joint initiatives to address the problems facing that region.

For my own part, you will be interested to note that the three issues of “shared importance” that are the responsibility of the local government portfolio - namely the Treaty, local government legislation and financial frameworks, will be addressed as part of my policy work programme for the financial year commencing 2000/2001.

This has been made possible through an increase in this year's Budget of $1m in baseline funding for the provision of local government policy advice; an increase of more than 50% over previous years.

The local government work programme will be structured around four specific projects:
1) a review and rewrite of the Local Government Act 1974, including issues relating to the Treaty of Waitangi;
2) The completion of the review of local authority funding powers;
3) A review of the local Elections and Polls Act and its replacement with a new Local Government Electoral Act; and
4) The introduction and enactment of a Local Government Law Reform Bill.

I’d like to talk to you about review of the Local Government Act in some detail before I go on to comment briefly on the other three.

LOCAL GOVERNMENT ACT

Your President wrote to me last month setting out Local Government New Zealand’s views on the review.

Although I have yet to formally respond to the specifics of the proposal that letter contained, our respective views on the limitations of the current legislation appear remarkably similar.

The Local Government Act is certainly well past its use-by date. On that we are most certainly agreed.

The Act has evolved as a mix of old, often highly detailed and prescriptive provisions and more modern generally flexible accountability-based ones.

Through a process of almost continuous amendment, the Act is no longer internally consistent and coherent, resulting in legal uncertainty, frustration, administrative difficulties and costs for local authorities – issues with which you are all no doubt, only too familiar.

Just as importantly, we are also agreed that, in its current form, the Act has the potential to hinder and frustrate our efforts to develop a strong working partnership between local and central government.

You have raised the blanket restriction on regional council involvement in many of the activities we have earmarked for concerted action as a possible case in point.

In this respect I agree that the review of the Act is a critical step if we are to enhance the sector’s capacity to act with central government to more effectively address these issues.

The central question then is not whether the Local Government Act should be reformed, but the nature of the powers that should replace it.

It is not my intention to pre-empt the review process by attempting to outline, in any detail, what particular form the replacement Act should take.

I can however say that I agree with your President that the powers it contains should, in general, be more enabling and empowering rather than just an updated version of the prescription contained in the current legislation.

Transparency and accountability issues will invariably form an integral part of the review. With power, of course, must go responsibility.

If local authorities are to have greater flexibility to act on behalf of their communities we must be sure that the electors and ratepayers have the capacity to involve themselves fully in the decision-making processes.

The balance between empowerment and accountability is critical.

One of the more unusual aspects of our work as elected representatives is that we get to spend other people’s money and, as the old saying goes; “he who pays the piper calls the tune”.

The other significant aspect of the review, and one that I have a particular interest in, is local government’s relationship to the Treaty of Waitangi.

Local authorities have become something akin to the meat in the sandwich on this issue in recent years.

Work on defining Treaty obligations has revolved almost exclusively around the relationship between Crown and Maori, with local government being left largely to its own devices when it comes to determining its own responsibilities and obligations.

This situation complicates the decision making process and hampers efforts to build sound working relationships between local authorities and tangata whenua.

It was very apparent at the March Forum that local government wants to know where it stands on the issue. Local authorities clearly want to do the right thing by all concerned but they must firstly know what that is.

From the Government’s perspective we acknowledge that it is time this issue was urgently addressed in order that the process of building healthy and sustainable relationships within our communities can continue. This is consistent with the Government’s Closing the Gaps strategy.

At present there are over 100 statutes and regulations which impact on areas of particular interest to Maori and out of which Treaty issues actually or potentially flow.

Existing research on this body of legislation has largely been uncoordinated and ad hoc in nature.

If the Treaty issue is to be addressed, it will be necessary to aggregate this work, fill in any gaps, and then consider the whole body of legislation in its entirety. Work on this project has already begun within the Department of Internal Affairs.

Once complete, this background analysis will better enable the Government to move to a position where:
a) the Crown, as the delegating authority from which territorial and regional authorities derive their powers and functions, can consider local government’s consequential obligations; and
b) proper legislative guidance could be given to local authorities to enable them to act consistently within the meaning and spirit of the Treaty.

I hope to have decisions on the review of the Local Government Act by December 2001 with enactment of a new local government Bill by the middle of the following year.

The time line for the review is undoubtedly ambitious given the work that has to be done.

I have therefore asked my officials to identify areas of possible cooperation with Local Government New Zealand as a means of hastening the process.

Your President has already indicated that she would look favourably on such arrangements and I will be communicating with her about this shortly.

FUNDING POWERS REVIEW

The Funding Powers Review was commenced in 1998 by the previous government, but appears to have languished somewhat during the dying days of that administration.

The intention of the review is to overcome a number of inconsistencies and contradictions which have become apparent in the legislation, particularly since the inclusion, in 1996, of the Part VIIA financial management provisions in the local Government Act.

I have recently approved a revised draft terms of reference for the review which my officials are currently discussing with this association.

The revised terms of reference correct a perceived bias in the review process towards user charging regimes. Although the draft terms of reference have yet to be considered by my Cabinet colleagues you will be interested to know that they currently incorporate a review of Crown rating exemptions.

I hope to have policy decisions on the review completed by April 2001, with enactment of a Bill by November of the same year. All going well, the new legislation should be able to be used for the 2002/03 financial year.

REVIEW OF THE LOCAL ELECTIONS AND POLLS ACT

It was agreed at the 7 March Forum meeting earlier this year that that it would be highly desirable if a new Local Government Electoral Law Act could be in place in time for next year’s local authority elections. I have every expectation that this will be the case.

The Society of Local Government Managers, SOLGM, has been working with your Association on this project for some time, and this work will be of great help in bringing this matter to a speedy conclusion.

The review is being conducted in two stages.

The first stage involves establishing a framework for future local authority elections. This will include
 electoral processes (though not necessarily the triennial review process, which may be more appropriately addressed through the review of the Local Government Act),
 provision for the introduction of an optional single transferable voting system (STV)
 proposals to limit candidate campaign expenditure,
 issues related to multiple candidacy.

I expect to have this stage of the review enacted by May 2001.

For technical reasons associated with the triennial review process, the Bill will not propose that local authorities have the option of adopting STV for the 2001 elections.

However the Bill will make this option available for the elections in 2004.

I will await with interest the deliberations of the Justice and Electoral select committee on a Green Party Members' Bill on the STV option, sent last week to the committee for consideration.

The second stage of the review will involve an examination of possible options for improving Maori representation in local government. It is intended that any legislation required as a result of this work will be enacted in time for the 2004 local authority elections.

Whether local authorities adopt STV is of course entirely over to you and your communities. The new provisions will be entirely optional.

I would like to think however that you will give the issue serious consideration.

STV has the potential to make our local authorities more representative of the communities you serve.

It increases the likelihood that those communities within our society that feel isolated and marginalised from main stream political life will have the opportunity for direct participation. That can only enrich the nature of political life in this country and strengthen the foundations of our democratic institutions.

LOCAL GOVERNMENT LAW REFORM BILL

As currently envisaged, the Bill will include clauses to:

 clarify the existing provisions in the Local Government Act relating to the funding of depreciation on local authority assets;

 explicitly enable local authorities to require their LATEs to pursue social and environmental objectives, as well as commercial ones;

 address a number of technical issues in relation to the Local Government Official Information and Meetings Act; and

 institute a new system for determining local authority elected member remuneration.

As you will be aware, Local Government New Zealand approached the previous government suggesting a review of our current system for determining local authority elected member remuneration.

I can disclose today that Cabinet agreed, last week, to change the current system in accordance with the recommendations arising from that review.

The key changes are:
 the Higher Salaries Commission will be responsible for making future determinations;

 the criteria used by the Higher Salaries Commission in making those determinations will be similar to those used for the remuneration for Members of Parliament;

 the Higher Salaries Commission will set specific levels of remuneration, so elected members will no longer be required to determine their own remuneration within a maximum and minimum range.

This is important because for too long you have been in the difficult position of having to decide your own level of remuneration. And this is a decision that has the potential to be politicised.

I expect that the use of a specialist body, such as the Higher Salaries Commission, will provide for a more accurate system of remuneration setting than has been possible in the past.

I will be very interested to see how the new system pans out.

Louise Rosson, ladies and gentlemen - I am pleased to have had the opportunity to speak to you this afternoon.

The challenges that lie ahead for both sectors may well be substantial but I believe that if we work together they can and will be overcome.

We all want the same thing - to make this country a better place for all our communities. I look forward to working with you to achieve that goal.

Before I sign-off, could I just put in a quick plug for community boards?

I’m aware that some people view the concept with a measure of scepticism. To some they are very much local government’s poor relations.

That is certainly not my view. I believe they enhance rather than detract from our system of local government and furthermore I believe they are here to stay.

Their success depends very much on you and the powers and functions you choose to delegate to them.

If used wisely they can be of enormous assistance to you in building sound working relationships with your communities.

Thank you again for inviting me here.

[Ends]

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