Q & A Panel Discussion

PAUL The panel this week is Dr Claire Robinson from Massey, Michael Barnett of the Auckland Chamber of Commerce and Nick Leggett, the Mayor of Porirua city, the country’s youngest mayor. I got the impression in that interview, I got a sense that this minister— almost as if the legislation’s trying to set out to protect ratepayers from their councils.

NICK LEGGETT – Porirua Mayor
Yes, that’s exactly what he’s trying to do, and he misses the point that councils are as accountable to residents, to voters as central government. And if residents don’t like us, they vote us out. But I think, Paul, what worries me – all the Minister’s comments hide the real agenda here, which is about recentralisation – Wellington knows best. Actually, communities know best, and they should be empowered to make decisions for themselves.

PAUL I wonder if at a local level there isn’t more creep, though. Because only a certain number of people take part in local-body politics, don’t they? Only certain types and numbers of people make submissions. Rates just keep going up.

NICK Well, costs keep going up, and you’ve got to ask what do councils spend rates on. Most councils spend money on infrastructure. We can only raise debt for capital projects, and that’s the other thing the Government have been talking to us about, that our debt levels are too high. But what has it brought? We’re actually having to deal with many years of underinvestment, and that’s why we’ve obviously— debt has increased. But I’m not against the idea that we’ve got to look at costs and efficiencies. Those are very important.

PAUL No, he’s saying costs are getting out of control, and spending is getting out of control at council level, and central government are going to do something about it. That’s what he’s more or less saying, isn’t it? What do you think? Our costs— I mean, have councils gone a bit funny and too loose with the rates, Michael?

MICHAEL BARNETT – Auckland Chamber of Commerce
I think they have, and I’m sorry, the ratepayer does need some protection, because a lot of what Minister Carter was saying was about good prudential care, and that’s not in place at the moment. But this year, you know, Nick Smith stands up and says, you know, ‘We’re going to do something.’ Everybody’s rates across the country average about 3%. If I look ahead over the next 10 years and take out Christchurch, I see that operating expenditure over the next 10 years up in excess of 50% to an excess of $11 billion, rates over the next 10 years will go up over 60% and exceed $7 billion, and debt will go up 96% and exceed $18 billion. And I’m saying I don’t want it to be a business, but I want it to operate in a business-like way, and at the moment it’s not. If you look at Hamilton, $40 million cost in racing V8s, and now Auckland’s looking at it. You know, to me, by the time the next council comes in, you know, they’re in the car, they’re in trouble. So I’m sorry, but the ratepayer does need it.

NICK Let’s not pick rogue examples, though, where councils, like the Hamilton V8s—

PAUL You’ve got plenty of examples, haven’t you?

MICHAEL What about Kaikoura? You know, they’re putting in an aquatic centre, spending $12 million.

Dr CLAIRE ROBINSON – Political Analyst
Look, look, look—

NICK But it’ll be brilliant for the Kaikoura community.

MICHAEL What about Rotorua? They’re spending 40 million servicing a debt that they’ll only pay— they’ll spend 40 million over the next 10 years, and they’ll only pay off 10 million of that. You know, some of this stuff is out of control.

CLAIRE But the issue here is that he is— You know, currently the councils have a mandate to be responsible for social, economic, environmental and cultural well-being.

MICHAEL Correct.

CLAIRE Now, those are very specific things that councils have to look for. The legislation is going to change that on to some broad interpretation of public service, and the Minister even talked about extraneous activity. Now, I’m worried because, yes, we may have a very— we may have an opinion about V8 cars, and I don’t like them personally, however, to then wipe out from the arts and cultural perspective a mandate to be looking after cultural well-being—

PAUL Well, he’s not really saying that. No, I think—

CLAIRE Yes, he is. He was absolutely saying that.

PAUL He said you can have your Ellerslie Flower Show in Christchurch. The council think it’s a good idea.

CLAIRE Yeah, but that’s because—

PAUL But when you start talking about the NCEA, go to hell is what he’s saying.

NICK No, but let’s— I want to clarify the NCEA. That is an absolute example of where the government have taken a rogue example. The Auckland Council have identified that South Auckland have— that’s where the young people are that there has to be focus on education. The Auckland Council is talking about monitoring and advocacy. It’s not talking about delivering education services, so let’s clear that up.

CLAIRE It’s a red herring.

NICK It is absolutely a red herring.

MICHAEL It’s a red herring, but on the same count, I’m going to bring you back to— Key point, forget your rogues, and I accept that. But it’s better prudential care, you know, so to me, you are going to have economic development where there’s going to be opportunities where the private sector won’t invest, the public sector will, and in time it can then pass it over to the private sector. I accept that, but we’ve got too many examples where it hasn’t worked. Better prudential care would—

NICK But why do residents in towns and cities across New Zealand need central government to protect them from local government? Local governments – when I walk out of my office, I walk down the road, Paul, and I’m accountable directly for the decisions that I and my council make. Isn’t that what we want?

PAUL I suppose one of—

MICHAEL If they’re not held to account, you know, we’re wearing the bill.

PAUL Yeah. I mean, I suppose one of the difficulties between, you know— the differences between local government and central government is you see what central government are doing every night on the telly, so you can react very quickly if you don’t like what they’re doing. Local government – you don’t see it, because not so many people take part, and it happens it’s not sexy in the news headlines and the newspapers.

NICK More people take part in local government. We all live in communities and neighbourhoods, and we use the facilities. We interact more with councils that we do—

PAUL What about the business of—?

MICHAEL Greater interaction.

PAUL What about the business of—? You think there is greater interaction?

MICHAEL I think there’s a greater interaction, but it’s still coming to the, you know, the vision of the average person across the community.

PAUL Yeah, but on the whole, it’s the same people making the submissions all the time, isn’t it?

MICHAEL It is. It’s exactly the same.

PAUL What about asset sales? Now, he was interesting on this. He said Christchurch being a unique example could look for settling its massive bills with a bit of asset sales. But he also didn’t rule it out round the rest of the country.

CLAIRE No, no, no. And it’s kind of like asset sales in disguise, isn’t it? And it’s like saying, ‘Yes, there’s one rule for government and another rule for councils.’ I think councils are much less encumbered by public opinion, actually, on asset sales. And I think that it’s going to be a controversial issue.

MICHAEL A couple of things we missed there, though. I mean, Christchurch would be better to get all the fundamental stuff in place before we start talking about stadiums and theatres and all of those sorts of things. You know, to me, I think the core things need to be put in place.

CLAIRE You cannot run an economic growth strategy if you don’t have stadiums and cultural things and exhibitions and galleries, because that is the core. That’s the DNA of who we are.

NICK It’s about community vibrancy. It’s about making places great to live.

CLAIRE It’s the character, it’s the culture, and, you know, when you go out and you’re starting to talk about brand New Zealand and New Zealand Inc, you know, we’re nothing without the culture in our communities.

MICHAEL Nobody disagrees with that. What I’m saying is that it’s a stage process—

CLAIRE But it’s not. You can’t have one— It’s not like you can have all the infrastructure without the culture. You’ve got to have them at the same time.

MICHAEL A part of the vision—

PAUL The one cheers up the people for the rest of it, I suppose, a certain element of that. Would you consider selling some assets if you had a really big community—?

NICK Oh, Paul, I wish we had some assets to sell.

MICHAEL I was going to say what have you got?

NICK No, we’re one of the highest-rated councils in New Zealand.

PAUL Would you like to buy some Auckland Airport?

LAUGHTER

NICK We’ve got very high rates because we don’t have investment income like a lot of councils do, like ports and similar types of things. So we would love to be in the position where we had that, because—

PAUL What have you got? You must have some?

CLAIRE Swimming pools?

NICK We’ve got swimming pools and the things that cost money rather than things that bring us money, unfortunately. But they’re all important. But, I mean, I look at things like electricity lines that have been sold off by communities over the years. We should be— Local government should be thinking strategically about how to acquire, particularly in the Wellington region, some of those sort of things that make money for residents in subsidised council operations.

PAUL Just very quickly, in summary from each of you, does local government need reforming? Do we need some new legislation? Michael Barnett?

MICHAEL I think we need some new legislation. I think we need to do some different thinking, and the big thing for me is, in Auckland, we have 500,000 ratepayers. I’ve got two million people working out there, so two million people using the city, moving around, doing a whole lot of things, but I’m only hitting 500,000 people. Why don’t I broaden the net instead of asking the same number of people to pay more money every time I go out there?

PAUL Toll roads, yes.

CLAIRE Well, yes, I mean, if there is reform, I just want to make sure that the economic agenda is not completely hijacking this notion that communities need character and culture.

PAUL Very quick word from you. Yes, a little bit of reform, a big reform?

NICK Yes, I think that we do need some reform. I think, in particular, Wellington is facing an issue over amalgamation like Auckland is, and this will theoretically make it easier, but I don’t actually think that this goes far enough.

PAUL Very good. We shall discuss it further in future, I’m sure.

ends

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