Hon Rodney Hide
Minister of Local Government
Minister for Regulatory Reform
Associate Minister of Commerce

Speech

Local Government New Zealand Conference 2009
Christchurch Convention Centre

Tuesday 28 July 2009

EMBARGOED AGAINST DELIVERY AT 9:40am

President Lawrence Yule, Vice President Kerry Prendergast, Carl Wright, Secretary-General of the Commonwealth Local Government Forum and distinguished guests. Thank you for the opportunity to talk today at your Annual Local Government New Zealand Conference. It’s great to be here.

This is, of course, my first opportunity as Minister of Local Government to address LGNZ as a national body. I have enjoyed meeting with you at sector meetings and in your regions and districts. This is an exciting time to be working in local government. A commentator recently wrote Local Government is now “sexy”!

I can’t take the credit for that, but I am using my position to emphasise local government’s importance in people’s lives and to the future of New Zealand.
Local Government’s critical importance is why I took on the role of Minister.

Your theme “Our Place in the World” is big, bold and inspiring. I love it

To achieve “Our Place in the World” we must dramatically improve New Zealand’s prosperity and super-charge our standard of living. We can’t achieve “Our Place” if we continue as a nation to drift ever further below the rest of the world.

That’s why ACT and National’s Confidence and Supply Agreement sets the goal of catching and matching Australia by 2025. That’s a big goal. It’s a stretch. It requires we dramatically lift our performance. But we can do it.
Setting the goal is important. It focuses our minds on what is important and what is not.

But we need to do much more than just set a goal to succeed. We need a plan to achieve our goal, we need to action that plan, and we need constant measurement of our performance against our goal.

That’s why I was so pleased last week to announce Dr Don Brash as Chair of the 2025 Taskforce. The Taskforce’s job is to measure New Zealand’s economic performance each year against achieving the goal. Then they will offer up the policies and institutional changes needed to put us on track to catch and match Australia.

I am now working with Don and Bill English to put together the rest of the Taskforce.

When I am assessing policy I ask a simple question: will it make the boat go faster? That is, will it boost our economic performance? That simple question focuses me on what we have to do to provide for ourselves and our children the prosperity and standard of living we so desperately yearn for. Far too many of our young and talented have to leave our place for other places to realise the standard of living they desire. As a country we can’t afford to lose their talent, enthusiasm and drive. We have to do better.

Making the boat go faster has been top of mind as I have visited councils in my new role as Minister.

There has been much that has impressed me.

Lawrence Yule and the Hastings District Council have been to the forefront with a proactive and client focussed efficient resource consent processing system. The council provides a key account manager for large or frequent consent applications.

A pre-lodgement service is also provided where a council staff member sits down with the applicant and works through the application to check that it is all complete and in order.

The system that Lawrence and his council have introduced saves time and cost for applicants, reduces frustration and error rates and importantly builds a relationship between council and customers. It makes our boat go faster.

And the results speak for themselves. Hastings District Council has a near 100 per cent compliance with on-time processing.

Hutt City has set a clear fiscal strategy based on what their ratepayers can afford. They have budgeted to that strategy thereby increasing the disposable income of their community and the profitability of their businesses. That makes the boat go faster. Hutt City has one of the lowest rate increases in the country while addressing council debt.

I visited Rotorua District Council recently and took note of Mayor Kevin Winters’ and CEO Peter Guerin’s commitment to good governance through a strong relationship between the elected councillors and their management team and a clear understanding of their respective roles. Good governance means good government, and good government is what we need to achieve our place in the world.
These initiatives all serve to make the boat go faster.

But two weeks ago I saw a programme that rocked my socks. I had the great fortune to visit the City of Manukau Education Trust. COMET brings business CEOs into schools, takes school principals into businesses, and brings parents and grandparents into the classroom to learn to read and to write. It’s a phenomenal programme.

Local businesses better understand and know the schools in their area. The schools better know the businesses.

There are parents and grandparents who have learnt to read and to write and to go on to get degrees and to teach. Now that’s making the boat go faster. That is amazing.

The children’s performance at school has dramatically improved as their family and home environment has become pro-learning and other children are now wanting their mums, dads and grandparents to take part in the programme.

COMET taught me the crucial role Local Government can play in better directing and facilitating centrally funded programmes such as education.

It has been something Social Development Minister Paula Bennett has been at me about for some time. I am enthusiastically working with her to see how we can, through local government, achieve much more in social delivery.

All thanks to COMET and the innovative work of Manukau City Council.

As I have travelled the country I have listened, to you, to ratepayers and to farmers and other businesses.

I have heard loud and clear the concern over rate increases, red tape, unacceptable delays and bureaucratic bungling. We need to do better, much better.

I have also heard loud and clear of the large and unacceptable costs central government has imposed on local government and thereby ratepayers.

Tim Shadbolt wrote to me explaining how his council could easily have held costs to the rate of inflation except for the costs central government had imposed over the past nine years. For this year alone, Invercargill City Council will spend an extra $1.59 million, or nearly eight per cent, of their budget on complying with these additional requirements.

It is clear to me that successive governments have imposed large costs on local government without care or adequate thought. At Local Government New Zealand’s request we have put a moratorium on the introduction of drinking water standards.

LGNZ have also expressed concern at the impacts of the new air quality standards. That’s why a review is underway to examine these issues.

As Minister for Regulatory Reform I want to ensure that central government policy making takes proper account of any costs to be imposed on local government.

With Bill English I am working to tighten cabinet procedures to take better account of local government.

A huge amount of regulation has been passed on by central government to local government to administer.

Two prime examples of over-regulation are the Resource Management Act and Building Act.

The complexities and bureaucratic processes of this legislation have heaped costs on councils, which have then been passed onto users and ratepayers.

The reform of these two Acts now underway will go a considerable way to lessening councils’ planning and regulatory costs and make it simpler to administer the legislation.

You have also made clear to me that the processes and procedures set out in the Local Government Act are imposing unnecessary cost, making your jobs harder, and slowing down our boat.

Accordingly I am looking at that Act. My review is guided by principle.

The first thing is that I believe in local government. That is to say, wherever possible, I believe that decisions are best left with individuals. Where government is involved, it’s best to have a government as local and as close to the people affected as possible. That’s why I support and believe in local government.

My job is not to tell councils what to do. My job is to provide the best environment for you to get on and do your job reflecting the wish and desire of your communities and their willingness to pay.

The principles driving my review are transparency, accountability and fiscal management.

I want communities to really feel that they are a part of the local community and its governance, and able to have their say.

They need to be able to see what’s going on and to be in a position to hold their councils to account for spending their rates money.

I also want Councils to be able to go about their business in a less risk averse, more empowered way, with the full backing of your communities.

My work programme recognises that:
o local government should operate within a defined fiscal envelope;
o councils should focus on core activities, and;
o council decision-making should be clear, transparent and accountable.

My officials are looking into:

Simplifying long-term council community plans. I think councils are required to do far too much consultation, and the consultation is not meaningful to the average person in your communities. I plan to streamline consultation requirements but ensure that councils must consult on the issues that matter to communities - rating levels; spending decisions and service levels for councils’ core business. As many of you know I am also looking into the potential for using polls or referenda for particular decisions. More about that shortly.

I am also looking into the effectiveness of the current community outcomes process and I intend to improve it; I am also examining the extent of audit requirements that you have to meet.

I would like to strip away some of the heavy processes that weigh you down and waste ratepayers’ money.

I have asked my officials to develop a process for “plain English” financial disclosures so that ratepayers can understand what councils plan to spend their money on. I would like to see councils having a Pre-election financial update (prefu) statement published before every election, (similar to central government) so that ratepayers and voters are clear about the state of the books, and can have an informed view on what the council should be focussing on in the next three years.

This links to my view that councils should identify and focus on their core roles and functions. In my opinion the basic infrastructure needs of this country, and of ratepayers should be at the top of the list of council spending, with the “nice to have” coming much further down the list, if at all.

Councils need a clear fiscal strategy identifying the rating level and exactly what ratepayers will get for that spend. Ratepayers should be the decision makers on this fiscal strategy – so there needs to be consultation. I’m looking into councils doing this through a poll or referendum at election time. Over and above this there should be a consultation process, so that the community is very clear what they have agreed to, and can hold the council accountable to those decisions.

I want to point out that a requirement for a financial strategy is not the same as rate-capping, or rate-setting by central government. I am not proposing these measures.

A good financial strategy will help councils; ratepayers and voters make better decisions about trade-offs. It will provide a basis to measure a council’s financial management record and help to identify future financial management issues.

In developing this work I am keen to build on the successes across the sector where LTCCP consultation has produced clear and useful summary information to ratepayers and voters.

I am also responding to ratepayer concerns about rates and expenses. It’s clear that fiscally successful councils set fiscal strategies with limits on rate increases, expenditure and debt and then set priorities within those limits set by the strategy. That seems to me proper fiscal planning.

I believe we need sound fiscal policies in local government and we need ratepayers able to have a say on that strategy. After all, it’s their money.

Before and since last year’s Election I have received thousands of letters and comments from ratepayers unhappy with a particular decision of their council. As part of my legacy I am determined to see a better relationship between local authorities and their electors.

I have consulted with Local Government New Zealand; the Society of Local Government Managers and other key stakeholders on the first stages of my work programme. I thank everyone for their cooperation and assistance to date.

I am particularly interested in your views about the core roles of local government. I appreciate that what might be a necessity for a large metropolitan council could be an absolute extravagance for a small rural council. At the heart of the issue is that if ratepayers are going to have some control over fiscal strategies then I want to ensure the basics are properly funded and maintained.

I hope to have legislation in Parliament for this work by the end of the year.

Driving all of this is the simple desire of how best we can make the boat go faster and achieve our place in the world.

I also believe it’s crucial, especially so in these times, that councils ensure that core activities are properly identified and funded before spending occurs on more discretionary activities.

As I have already mentioned it’s not about me telling local authorities what they can and cannot do. Rather it is about encouraging greater local democracy where councils consult more widely and effectively and seek a mandate for “non core spending.”

I cannot leave you today without talking about Auckland.

At this stage of the process, it’s too early to say what the implications of the work on Auckland may be for other local authorities.

There are at present no proposals to take similar steps in other regions, as we acknowledge Auckland has a unique set of circumstances that have needed to be addressed for many years.

Further down the track, we can consider the implications of the review of Auckland’s governance for local government generally and structures outside Auckland.

Auckland’s local governance model is not working and hasn’t for some time. But defining the problem has always been the easy part. The hard part is fixing what is not working.

So that’s what we are addressing.

Allow me to share a little bit of history with you.

Ninety years ago in 1919 Michael Joseph Savage campaigned for Labour supporting a single Auckland Council. And fifty years ago Sir Roger Douglas’s grandfather, Bill Anderton, Minister of Internal Affairs, called on Aucklanders to unite with a single council.

So the idea is not new.

What’s new is that we have had the Royal Commission report and a government prepared to do something about it.

Auckland is a great city and region; our one truly “big” city and a critical gateway to the rest of the world. We can make it even greater. That’s what this reform is all about.

And getting Auckland right is important not only for Auckland but, it’s important too for the rest of the country.

If we want the boat to go faster, if we want to achieve our place in the world, then getting Auckland right is crucial.

I approach the policy work on Auckland again with the simple question: What’s best for Auckland?

And not just best for the here and now, but best for as far as we can see into the future.

It’s not about making the decisions for Auckland. It’s about providing the best governance structure to take Auckland forward in the decades ahead.

The Government wants Auckland to be able to speak with one voice on the critical regional issues that are so important to get right at that level. We want a mayor and a council able to speak for and represent all of Auckland. We want candidates able to campaign on their vision for the city – and region; to fire our imagination and be elected and do the job.

But we want more than that. We want the many and varied voices and communities which make up Auckland to have a clear and significant role in its future. The diversity of this great city is what makes it strong and exciting.

We want the proposed local boards to have a meaningful role and make local decisions. We don’t want the Mayor and council diverted from the regional issues to be tangled up in local issues that could best be handled locally.

The only constraint should be that local board decision- making should not undermine regional decision-making.

The Government’s proposed model is for a unitary authority with two levels of decision-making but one administration supporting both.
As you know the select committee has been hearing submissions on this model and I await their report with interest.

The response from Aucklanders has been fantastic and we are working with Auckland and officials to get the very best result for Auckland and for our country.

It’s fabulous work to be involved in.

It’s an exciting time to be in local government. I feel very privileged to be Minister.

It has been great to talk with you today. I am looking forward to working with you.

The one thing I am sure about is that not all the wisdom resides in Wellington. There is never a monopoly on good ideas.

I have learnt such a lot from mayors and councils. I especially have appreciated the help I have received from President Lawrence Yule and your Chief Executive Eugene Bowen. Both have helped me as new Minister to understand local government better.

I have also been impressed with the work of the Department of Internal Affairs. They have been tremendous with their enthusiasm, commitment, intelligence and effort. I couldn’t ask for better.

Thank you for the opportunity to outline my thoughts and priorities. We are now moving to a discussion session so I am hoping we can pick up and canvass some of the ideas we have been talking about.

Together, we certainly can “Achieve Our Place in the World”.

Thank you.

ENDS

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