D Carter: Second reading of Local Govt Amendment Bill
Hon David Carter
Minister of
Local Government
15 November
2012 Speech
Second
reading of Local Government Act 2002 Amendment
Bill
I move, that the Local Government Act 2002
Amendment Bill be now read a second time.
Mr Speaker, local government is a crucial component of New Zealand’s economy. The 78 local authorities make up 4% of GDP, spend $7.5 billion per year of public money, and manage around $120 billion worth of public assets.
But behind these numbers the simple fact is that most New Zealanders are affected by the decisions and actions of their council on a daily basis, and are certainly affected when they receive their quarterly rates bills.
Because local authorities have such an impact on the daily lives of New Zealanders, and because they are charged with spending ratepayer money, it is vital that they operate in an effective and efficient manner.
This means being financially responsible, transparent, and accountable to ratepayers.
That is why the local government reforms being undertaken by this government are so crucial to New Zealand’s communities. The reforms will improve the operation of local government in New Zealand. They will focus local authorities on operating more efficiently and effectively by doing things that only they can do. The reforms will encourage local authorities to reduce red tape and compliance, minimise rates for households and businesses, lower council debt, and provide high quality infrastructure at the least possible cost.
Mr Speaker, these reforms are not about bashing councils, or imposing constraints on local democracy, as suggested by the opposition members:
• These reforms are
about putting in place a framework that means New
Zealander’s rates don’t continue to increase on average
by 7% per annum as they have over the last decade. Over this
period local government debt has quadrupled from $2 billion
to $8 billion. These trends must be
stopped.
•
• These reforms are about ensuring
that ratepayers are not put in situations that Kaipara
District Council ratepayers are currently in. Where a
council with a population of 18,000 runs up debt of $80
million, and the community is left with crushing rates
increases as a result.
•
• These reforms are
about ensuring that communities can decide how they want to
structure their local governance arrangements. Since 1989 no
local government reorganisation has taken place under the
existing rules. It is a nonsense to suggest that
circumstances have not changed in the last 24 years, or that
communities have not wanted change. The fact is that the
barriers for communities to effect change have been too
high.
•
Mr Speaker, this Bill marks the first phase
of the Government’s programme for reform of the local
government sector.
It amends the Local Government Act 2002 to refocus the purpose of local government; introduce financial prudence requirements; strengthen council governance; and streamline local authority reorganisation procedures.
The Select Committee received over 500 submissions on the bill from individuals, organisations, and local authorities. The level of interest was significant.
I am therefore disappointed that the opposition members on that Committee turned down an offer to work constructively on this Bill and the disregard they showed to the many constructive submissions.
An offer was made by the Chair to put some of the contentious parts of the Bill to one side and constructively engage on the rest. Unfortunately this offer was not taken up. As a result, the Bill has returned to the house largely unchanged.
Because of the Committee’s inability to agree, I will be tabling a Supplementary Order Paper during the committee stages on the Bill that will pick up on many of the good ideas from submitters, and address the issues they raised. These include making it easier for communities to exercise their vote in a poll by changing the petition requirements to needing 10% of voters in any affected territorial authority area, and to increase the number of days allowed to complete the petition from 40 days to 60 days.
Further amendments in the SOP will:
• provide clarity around the
circumstances when the Government might consider using the
assistance and intervention framework; and
•
• provide for a more flexible structure for
communities to reorganise their local governance
arrangements, should they wish to do so. The proposal will
enable some regions to utilise a two tier structure that
would deliver the most effective local governance for the
community.
•
The few amendments the Committee has
recommended clarify the Bill’s intent and improve its
operation, and the Government will be supporting them.
Mr Speaker, one area of the Bill that the Government will not be proposing change is to the purpose statement. I have carefully considered the differing views on this issue, but I firmly believe a more focused mandate for local government is necessary.
The intention is not to prescribe what local authorities can and cannot do, but rather to better define the appropriate scope of their activities. Individual local authorities and their communities will decide what activities matter to them, and how much they are willing to pay for them.
The new purpose statement will encourage local authorities to take a fresh look at what they are doing and why – and to seek their communities’ guidance as to what their current and future needs are.
Mr Speaker, this Bill is an important milestone that will improve the efficiency and effectiveness of local government; it will provide the right settings for the local government sector to play its part in growing New Zealand’s economy.
It will deliver vital reforms to benefit our communities, businesses, industries and households for many years to come.
I commend this Bill to the House.
ENDS