Nelson Mayor Nick Smith is concerned that the top-polling Councillor from the Central Ward, Cr Lisa Austin, has been threatened with prosecution and dismissal, potentially resulting in a $200,000 by-election.

“It is wrong that Cr Austin is being threatened with prosecution and dismissal when there is no evidence of harm or any wrongdoing. She was democratically elected last October, and it is neither fair to her, nor – more importantly – to the people of Nelson who voted for Cr Austin for her to be excluded from Council. The combination of the law being an ass and daft interpretations is undermining our local democracy,” Mayor Smith says.

This situation has arisen as a consequence of the Local Authorities (Members’ Interests) Act 1968 and Cr Austin’s business with her husband Bryan, Austin Transport Tippers Ltd. The Act has rules around the financial interests of Elected Members who have contracts with a local authority amounting to more than $25,000 in any financial year. Nelson City Council does not do any direct business with Austin Transport Tippers Ltd. Two of Council’s contractors, Fulton Hogan and Isaac Construction, use Austin Transport Tippers on set hourly or tonnage rates as an overflow when required for work carting gravel, sand, topsoil and other materials. Council staff have no role in the hiring or rates paid for the truck hire.

The Office of the Auditor-General has provided many approvals across New Zealand for Elected Members affected by this law. Council has been working for months with its legal advisers on getting approval for Cr Austin.

“I was advised on Monday by the Chief Executive that the Office of the Auditor-General had declined Council’s application for an approval, that they were making a decision on whether to prosecute me and that I could be dismissed from Council. This situation is very distressing. I do not feel able to participate in Council meetings today and tomorrow with this hanging over me. I do not wish to resign and believe I have done nothing wrong”, Cr Austin says.

“I stood in good faith for Council because I wanted to serve the Nelson community and have been careful to keep my business interests separate from my work representing Nelsonians. I was very open about my business interests in Austin Transport Tippers Ltd in the campaign and believe many electors in the Central Ward voted for me because of my experience and the business acumen I bring to the Council table. I am aghast that I face the risk of being prosecuted and ousted.”

Mayor Smith says the Office of the Auditor-General argues, contrary to Council’s own legal advice from Simpson Grierson, that it cannot provide an approval for a new Councillor.

“It is plain from last week’s correspondence from the Office of the Auditor-General that they want Cr Austin dismissed. This appals me as they have provided no evidence of Cr Austin doing anything wrong or causing any harm. This is Wellington bureaucracy at its worst, applying a daft interpretation of the law and showing a complete lack of respect for local democracy,” Mayor Smith says.

“I am caught in a catch-22 situation where the Auditor-General will not consider an application from a candidate like me before an election and will not consider applications retrospectively after being elected as a Councillor. I cannot understand the logic of why, if I was a Councillor re-standing, I could get an approval,” Cr Austin says.

“It is a daft interpretation when an existing Councillor can get approval – from when they were on Council and may have been able to influence a decision – but not for a new Councillor who would have had no opportunity to exert influence over any previous contracts or work. It is unfair to Cr Austin that other Nelson Councillors, in similar circumstances, have had approvals,” Mayor Smith says.

“I have some sympathy for the Auditor-General as the law is outdated and an ass. The Auditor-General has previously advised Parliament that this Act is ‘poorly drafted’, has ‘an unclear rationale’ and has said: ‘We have expressed doubts about whether the contracting rule continues to serve a useful purpose at all.’

“No-one, to our knowledge, has been prosecuted under the Act in more than 30 years. It dates back to the 1960s when New Zealand had 850 local bodies, when Mayors and Councillors were directly involved in procurement decisions, when there were insufficient processes for managing potential conflicts of interests and when there was no Act requiring Councils to maintain and publish a register of Elected Members’ pecuniary interests”, Mayor Smith says.

“I wrote yesterday to the Office Auditor-General requesting a decision at the earliest opportunity on whether they intend to proceed with a prosecution. The uncertainty is compromising the democratic governance of the city in that a person Nelson elected is not able to participate in important decisions for the city.

“I also worry about the consequences of Cr Austin being prosecuted and dismissed. It is a total waste of $200,000 of ratepayers’ money to have a by-election. The impact of dismissing a democratically elected Councillor in this way will have a corrosive effect on people’s public confidence in our local elections and people’s willingness to stand for Council,” Mayor Smith says.

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