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Why denial of full democracy?

Rt Hon Winston Peters
New Zealand First Leader
Member of Parliament for Northland
13 JUNE 2016


Speech by New Zealand First Leader and MP for Northland Rt Hon Winston Peters
Mangawhai Business Association
Mangawhai Bowling/Golf Club
221 Molesworth Drive
6.30pm, Monday, 13th June, 2016

Why denial of full democracy?

The National Government says it is a consultative government.

It’s not.

We saw it first with Environment Canterbury when the National government changed the Local Government Act (LGA) in 2012 after the Canterbury earthquakes.

As a result of this legislation the Minister of Local Government can meddle in the affairs of local councils.

Forget the fact governments have traditionally had no right to interfere in legitimate local government affairs.

The Key government runs according to its own rules.

We see it now in Auckland with John Key acting like a bully, holding a stick over the Auckland council, telling them to fix housing or the National government will put in commissioners.

This is not fair government. The super city is the national government’s child. The mass build-up of demand in every facet of Auckland’s economic and social life is of this government’s own making.

It puts one in mind of the old governance from the streets of New York in the days when ward bosses told people what to do, who to vote for, or else they suffered the consequences.

We call it “bilge rat” politics.

Recently we had the Associate Minister of Local Government Louise Upston announce the Kaipara District Council will return to a fully-elected council later this year.

She said:

“The Kaipara community has an opportunity to determine its future and I encourage community members to make sure their voice is heard in the elections. I also encourage any community members who want to make a positive difference to stand for Council.”

There was no mention of the word “democracy” in her carefully scripted media release, nor was there any reference to having a council “democratically elected”.


Because the council is not returning to a fully democratically elected council after government appointed commissioners, running the council since 2012, are replaced in October.

The government is appointing a Crown Manager and a Crown Observer to ensure they can keep sticking their noses into the affairs of the Kaipara council.

The Crown Manager, says Ms Upston is to “take responsibility for certain outstanding legal actions, on behalf of the newly-elected council. Newly-elected council members will then be able to focus on providing effective governance and on the district's future, rather than being distracted by past issues.”

There is no other detail. Certainly not on whether the Crown Manager or Crown observer have any qualifications to do the job backhandedly given to them by a junior minister.

Why should any possible court action be taken from the scrutiny of a mayor and councillors elected by ratepayers and left to a Crown Manager?

What is the full list of the Crown Manager’s terms of reference?

Section 258D of the Local Government Act states:

6) A local authority must—

(a) co-operate with a Crown Manager so that he or she may fulfil his or her terms of reference; and
(b) comply with the directions of a Crown Manager;

That sounds like the handbook for a little despot answerable to only one person, a dictator from the government in Wellington.

The Crown Manager will have his hands on the steering wheel and the council will be sitting in the back seat and told to shut up.

As for the Crown Observer, Ms Upston says “the observer will not be involved in decision-making and will only offer advice or guidance."

The observer will be the little despot’s enforcer and navigator sitting in the front passenger seat, making sure the locals stay in line.

Any advice he gives will have to be followed.

And what happens if the locals in the back seat rebel?

Ladies and gentlemen, Ms Upston’s words that the Kaipara community has an opportunity with the local body elections to determine its future are pure propaganda.

The government’s hands and those of their associated vested interests have been all over the Kaipara council, brushing incompetence and corruption under the carpet.

This will continue under the Crown Manager and Crown Observer.

They will be determining the course of the council’s future – not the elected council, and the Mangawhai ratepayers will have to pay for it.

All this from one of two Ministers rated as “weaker” junior ministers by last week’s annual Trans-Tasman Government Department Review. In other words, she is utterly out of her depth.

Auditor-General’s Office

The Auditor-General’s Office has managed to walk away from five years of gross incompetence with a pitiful settlement pay-out to the Kaipara community of $5 million.

The Auditor-General apologised to the community for the failings of her office and the settlement was reached conveniently without either side – the commissioners demanding, or the Auditor-General admitting, liability.

This is a tawdry exercise in deception and with respect you ratepayers in Mangawhai have got to make a decision. It’s not a complicated choice. It’s whether you are going to tolerate duplicity, deceit and non-accountability where your interests are concerned.

In the 2014 General Election and in the 2015 by-election there is clear evidence that a great number of voters here are prepared to reward deceit and severe unfair economic treatment.

In short they went out and gave their vote to a political party that caused them to be financially oppressed as though such appalling central government behaviour was of little moment to them. The question tonight is, if some of these people don’t want help to have a serious wrong righted, as their vote suggests, then none of us can help.

It is over to you. If you want to fight back you have to decide to join the fight.

Let’s look at the facts

In 2003 the Kaipara District Council advised Mangawhai residents the cost of the sewerage scheme would be no more than $10.8 million.

The figure blew out and council borrowed $57.8 million – effectively leaving council with a debt of approximately $80 million.

And through all this, over five years, the Auditor-General’s Office allowed clean audits to go through on the Kaipara District Council.

Instead of defending the people who are bearing the cost of all this, politicians rushed to defend the Auditor-General’s Office.

The government appointed commissioners did not even move to take action against the managers of the project Beca Carter Hollings and Ferner Ltd, yet they were reappointed by the government for another term.

The former Northland MP Mike Sabin sponsored the highly undemocratic retrospective legislation to validate Kaipara’s rates and at the same time said the Auditor-General’s Office should settle the costs or losses.

What a farce, and what comfort is this for ratepayers who through no fault of their own are left to grapple with a monstrous debt of $74 million?

The cost of this rare example of Audit New Zealand’s failure has to be borne by the government. There’s got to be accountability, transparency and admission of guilt when the facts plainly point to that.

Had the department acted in its usually competent manner, the debt blow-out would have been apprehended early and fixed up before it reached disgraceful levels.

This was a rare failure for the Auditor-General’s Office but nevertheless this failure cannot be swept under the carpet and ignored in the way Mike Sabin’s bill set out to do. National and other political parties in Parliament took the crude view – we have stuffed up now you pay for it.

The government must clear the debt – as they did when they underwrote South Canterbury Finance and its 35,000 investors through deposits, debentures and other credit investments.

Worse still, government ministers did not put a cap on the amount being underwritten and, as a result, the SFC accounts blew out to $1.6 billion.

This all happened under John Key, Bill English, and the Treasury department in 2010.

Which begs the question, which one of you here would guarantee or underwrite a commercial obligation without capping the liability?

You wouldn’t, but Mr Key, Mr English and Treasury did.

So whilst we are at it how did these two politicians get a reputation for being “steady hands managing our economy”. This transaction, South Canterbury Finance, the SkyCity, Novopay, police computer, Silver Fern Farms, Rio Tinto, Warner Bros, or last month’s budget surplus forecast which has all but vanished within a month … all scream the very opposite.

The South Canterbury malfeasance makes your debt look like a mole hill. So the government stepped in to help South Canterbury but passed an Act to not help you and more importantly stopped you from suing them. The government used an act of Parliament as an excuse to help South Canterbury Finance but passed an Act to not help you, and more importantly, to stop you.

This speech is being given to your Business Association, so the question is, “which business or person here is prepared to defend this sort of behaviour?”

Ladies and gentlemen, I gave a commitment here before the 2014 election that with your support I would fix this debt. I renewed that commitment in the Northland by-election. But that is dependent upon your commitment as well.

I need your word on that. Because I intend to keep my word.


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