Local Government Law Reform Bill

Part 4 is a substantial part of this bill, and the National Party wants to record its opposition to it. I want to say again as we go through this bill, given the changes that have been made to Part 1, that it is very likely—although the final decision has not yet been made—the National Party will support this bill in its third reading. But that is yet to be considered and confirmed. In doing so, however, we want to make it very clear—when members’ Hansards are pulled out in future debates and we are told that we voted for this bill in the third reading—that there are parts of this bill we are adamantly against. We want to register our view, just as we did, for instance, in Part 3.

My other colleagues will talk about other parts in relation to changes to legislation affecting parks and to contribution development levies. I want to talk about long-term community plans and about the way in which this Government has gone about imposing this huge cost on local government, and, as a consequence, on ratepayers. The genesis of the idea of a long-term community plan actually started in 1995 with the National Party. It was the National Party that said that both central government and local government needed to have a good look at infrastructure right across the country, to see what its infrastructural needs were, to see what we had, and to see what the likely costs would be in the future—and the concept is good, because we used to ignore what was underground until it busted out on us.

So we started the process a number of years ago. But then this Government came along and put all sorts of fancy requirements and compliance costs on to local government and, as a consequence, huge costs on to ratepayers. The system we have now is silly. Local government has to sit there and work out a draft long-term community plan. It is required to take a note of inflation over the next 10 years, it has to look at all sorts of other costs over a 10-year period, then to consult with the people in the way it does. Councils have huge numbers of meetings around the community and they are lucky to get two or three people turn up to them. There are huge costs, great staff costs, and a lot of council time for little benefit and little involvement of the community—and that is just the draft. Then there is the auditing by the Audit Office—by people from overseas because they do not have enough auditors. It is silly. The process is silly; the concept is fine. The Greens actually saw that thing through. Jeanette Fitzsimons, to her credit, as chair of the Local Government and Environment Committee, passed the thing last term and, again to her credit, the concept was fine. It was the bits this Government put around it that made it a silly idea and imposed huge costs on local government.

Quite honestly, I say that this Government is starting to be recognised by the ratepayers and councils of this country as putting in too much compliance and too many costs. Rates are going up with little return, and it is because this Government, this Minister in the chair, the Hon Mark Burton, and this Prime Minister, the Rt Hon Helen Clark, are imposing unnecessary requirements on local government and communities, so that they are not delivering services. Why could we not have gone straight to a long-term community plan, got the figures and facts out there in front of the people, then started working on it? When we think about the audit the Government has required to be done on draft schemes, the problem is that the Government does not trust local government. That is really the issue, when we think about it. Is that not the logic of it? Why, otherwise, would the Government have something audited, if it were not that it did not trust local government to do its job? I do. Out of all the things that have been audited, only three have qualifications, and the councils took those decisions deliberately. They disagreed with the Minister, for example, when he said that councils were required to put in an estimate and judge what inflation will be in 10 years’ time.

It is that sort of stupidity and those sorts of idiot decisions that have meant this Government has put extra costs on local government. Quite honestly, I think that it is unnecessary. As I say, to the best of my knowledge, only three councils out of all those audited have got qualifications, and the three were for minor details. There was no need for audit; local government authorities and their officers were doing a good job.

I have to respond—

💬 Dr Richard Worth: Great to hear the Minister respond on that issue.

Look, this Minister responds on every issue—the member should know that I make a practice of trying to engage sensibly on sensible points. The previous speaker has raised some interesting and important points, but I have to challenge what he has said. In relation to the planning process, he said that on the one hand it was a sensible idea, but he said that on the other hand authorities should have a plan, go out there, and get on with it. Well, the process is about consultation and transparency. The process is about authorities saying that there is a proposal of what they intend to do and, just as important, there is what it will cost. Let us get some feedback on what people want: do they want this, or want more or less of it, and are they willing to pay for it?

The member himself raised a very important point about part of what drives this process. That is, for a couple of generations, councils—generally, but not always; there are some notable exceptions—

💬 Hon Member: And Governments.

—and Governments have largely ignored what was underground and could not be seen, until it was broken. Then it has fallen to some other generation to fix it. That is what is happening around the country now, because things are wearing out about now. Many communities are faced with massive infrastructure costs, just in order to stand still. Most communities are not all that content with standing still; they want to improve. They want to develop, and they want new opportunities and new facilities. Those are the challenges that councils face. That process invites communities to be very much part of an open and transparent process, in which they make value judgments about their priorities and on what they are willing to pay. That has to be a process of genuine engagement and consultation—not simply someone flicking off a report and saying: “This is what we are going to do. Thought we would tell you about it and, by the way, you were consulted.” That will not do.

Secondly, in relation to the issue of audit, I say to the member that I am pleased that at the end of the audit process, it looks as if there are three, possibly four, qualified audits. But I can equally say—because, of course, I have kept a careful watch on this issue; I have engaged with local government and I have certainly engaged with the auditors—that had it not been for a process of engagement with the auditors, there would have been many, many more qualified audits than there will be. That tells me that the audit function is adding value to the process. Some of that cost may well, in the case of some councils, save ratepayers—for the price of, say, $30,000 extra—a million dollars of unnecessary expenditure.

So I caution members, when talking about the cost and benefit of audit, to be careful not to get too far ahead of the facts, because I think that at the end of this cycle, it will become clear to many members that the audit function has added significant value, and has saved considerable cost and unnecessary expense for many ratepayers around New Zealand. I would hope that the next time the audit cycle takes place, it will be a lot smoother, because the lessons will have been learnt. But it is clear from this cycle that it has been helpful to many councils. It has cost a little bit, but it could have cost ratepayers a great deal more of unnecessary and unwise expenditure without it.

So, all in all, I think this is good progress, and I am confident the process will continue to improve over time. It engages communities in making quality decisions, on their own behalf, and it includes communities working with their councils to determine their priorities and what they are willing to pay for.

When I spoke to Part 2 earlier I alluded to how much I have enjoyed working through this particular omnibus bill. However, as my colleague John Carter just mentioned, it is difficult, when we have such a wide range of items coming through in one bill, to agree totally with some of them but disagree with one or two. We end up voting against certain parts, when in the main they are actually not bad but the Government just stuffed them up a little in the process. That is when it gets a bit difficult.

I suppose what I want to do, in this opportunity to speak to Part 4, is to comment on a couple of provisions we agree with and a couple we disagree with. We certainly agree with new section 138, inserted by clause 33, which talks about parks. It talks about the need for a local authority to consult the public before selling or disposing of parks. That is not an issue, at all—we can buy into that. Parks are very important to the community, and it makes a heck of a lot of sense to have a solid consultative process when one is to embark on disposal. Where we think the bill gets a little bit off-track is in clause 34, which talks about minor boundary changes. If a council has a park, and it wants to make an itsy-bitsy, teeny-weeny, little boundary change to the park, the bill suggests that the council has to go through the full consultative process on that itsy-bitsy, teeny-weeny boundary change. The word is “minor”. It could be that just a footpath is being put in, or a wee bit of road is being widened, but a full consultation process has to be gone through. That is incredibly expensive, and National thinks that is stupid.

Development contributions are also alluded to in Part 4. We do not have an issue with development contributions per se, but the provision is a warning to authorities to be careful that their development contributions are fair. We believe that development contributions—as the Property Council of New Zealand indicated to me just the other day—have a role in funding, but there is a fairness issue. One of the things I am glad we did park in the select committee was the issue of giving development contributions to regional councils. They want them, but we have said that we should have a good talk about it and look at this issue, which is highly complex. A report is coming through from the Local Government Forum, and we agree with that.

The third and final matter in Part 4 that I would like quickly to talk to is the long-term council community plans. There is consultation fatigue, I tell the Minister. He talked about how fantastic it is that communities are being consulted on their long-term plans. We do not have a problem with that. But the Minister should not forget that every year they have to do an annual plan. Asset management plans are also done, by law, and there is now a 3-year review of the long-term council community plan. I can assure the Minister that every time a new council gets elected, its members go through the whole thing all over again to make sure that the new council buys into the strategy and vision of that plan. The community is very tired of consultation. I tell the Minister that I think we have to be careful that we do not lose the community in this work we are asking it to do—at a very expensive cost. The Queenstown mayor made a point of telling me that it has cost $350,000 and has taken one person 6 months just to do the council’s little bit through the long-term council community plan process. The mayor is actually not sure of how much the community really knows is happening. That is where we have an issue.

I hear what members say about the need to be transparent and the need for councils to be audited, but I assure them that the audit does not look at what the community is deciding but at whether the council has dotted the i’s, crossed the t’s, and followed the process. I do not believe that this will result in any long-term big savings because the other costs in the process happen when councils spend their money on things. The audit does not look at what councils are spending their money on. It looks at whether inflation was included and whether all the bits and bobs were done—bits and bobs that actually have very little relevance in the long term to the community but they are very much relevant to auditors, who get right into that. National members like a lot of what this bill does, but there are bits and bobs throughout it that we think are wrong. We will be voting accordingly.

I place on record National’s opposition to Part 4. It is good to hear the Minister in the chair, Mark Burton, acknowledge that there will be, in his words, a little bit of cost associated with the audit process of long-term council community plans. Not only have I engaged with local government but I have also been part of local government, and I have sat through a number of consultation rounds to do with long-term council community plans. I made a quick call to one of my former colleagues, and I asked him how much, so far, the 2006 audit of the long-term council community plan of the Waitaki District Council has cost. His answer was that the council had received an account for about $30,000, and another account for around $60,000, or a wee bit more than that, perhaps—he was not quite sure what else was still to come—so I think it hurts. A bill of $100,000 for a small local authority of 22,000 people hurts.

That bill of $100,000 for the audit of a long-term council community plan is just for the audit. It represents just the very beginning of the cost associated with long-term council community plans. Months and months of officer time is taken up with writing reports. A number of meetings are held and multiple subcommittees are formed, because we all know that local government committees must discuss the various aspects of long-term council community plans. I say to the Minister that consultation and transparency are laudable objectives within local government, but they also come at a cost.

To the ratepayers of the Waitaki District Council, that 10-year long-term council community plan is just a document. In the words of one local businessman who spoke to me, I ask: who reads it? That is probably a fairly good question. Who does read a long-term council community plan apart from those people who are connected with its writing or auditing? In my time as an elected representative on the Waitaki District Council, I spent an awful lot of lost hours involved in consultation and in working up a long-term council community plan—and for what? It was for no gain for the district, I venture to add. All that those plans do, in my experience, is tie up local authorities, ever more, in red tape. Those plans are a recipe for achieving nothing.

I will tell members why I hold that view. As soon as a local authority wants to get on with some kind of major project, that then triggers that magical significance clause. That special significance clause then triggers the special consultative process. That special consultative process might be transparent, but it is also costly, lengthy, and a recipe for very, very slow progress, in a local authority. I tell the Minister that a community does not stand still. It does not want to stand still, but in terms of infrastructure and any major projects, if it is not moving forward, spending money, and planning for the future, then it is surely moving backwards.

I refer to another provision in Part 4, which is the requirement to review bylaws every 10 years. The Waitaki district until recently still had bylaws in force about hitching horses to hitching rails along the historic part of town. Actually, there was nothing terribly wrong with those bylaws—they did not do anybody any harm. There is also nothing wrong with a review of bylaws, except that we keep coming back to the cost. Do members know what the major gripe is with local government that ratepayers have? It is the level of their rates. I suggest that a lot of the anxiety and pain felt by ratepayers in New Zealand is caused because of the level of rates imposed by the costs brought down by this Labour Government.

I will take a short call on Part 4. Some points have been made by our team and I pretty much concur with all of them. Mark Blumsky made the point that inside the bill are some things we will go for and some bits we will not go for. Those bits, and some of the things we are for, have been outlined by the previous three National speakers. I can look, as a businessman, at clause 32 regarding the removal of the prohibition on a local authority from borrowing foreign currency. An authority might be going to buy a container crane that comes from Germany or somewhere and want to take a forward position. It seems fine to me that we allow those sorts of provisions. So there are bits and pieces in this part that look OK.

But I want to pick up a theme, and I would like the Minister in the chair, Mark Burton, to respond to it. I want to explain to him the position I was put in last week when I met with my local mayors and chairs, which I do on a reasonably regular basis. We talked about the long-term council community plans. Four local authorities were represented, and some said that the plan gave them a bit of focus. They said that the plans were quite expensive and that they did not agree with some of the decisions made about the audit process, but that the plans gave them some focus. I have to say that that was not the majority decision. There was a general view that the plans cost a lot and that some bits just do not make sense. For example, the representatives asked how they could value stuff—they said they could not look forward and say where some of the costs would go, so they got into trouble with the audit process.

The Invercargill City Council said that its plan had cost one point something million dollars, that it had still not got through the process, and that the plan had not added anything. It said it did not hold assets and that it just wanted to get on and do the job. So there was a mixture of views. But I say to the Minister that the question put to me was why we in Parliament have a distinctly different system from that in local government. When we read Part 4, we see that the word that comes up all the way through is “consult”—“consult” here and “consult” there. There is a high level of consultation on a long-term council community plan. The questions directed to me were why we in Parliament do not have to consult like local authorities do, and why we are using local authorities like guinea pigs when they have to do all this consulting and we just do what we want to do. They said that we have a system whereby when we get into Parliament, we are the winners for 3 years, and if people do not like it, they can have a go in 3 years. But local authorities are not allowed to do that. Members of Parliament head off to Wellington for 4 days a week, or whatever, but local authority members cannot even buy bread or milk without facing people on a daily basis. So members of local authorities are accountable on a daily basis. They cannot get away with anything that would cause the public to lose understanding of where they are going.

The question was why elected members of Parliament do not undertake the same consultation process. Local authority members made those very points. Why do members of Parliament not have a consultation process about the size of the surplus we have? Why do members of Parliament not have a consultation process about whether we should have tax cuts? Why do members of Parliament, or the Government, not have a consultation process about the Kyoto Protocol, the free-trade agreement with China, or any of those other things that they just go and do? Why are there two systems? Why does the Government have experiments on local government that it is not prepared to do itself?

I thought that those were very pertinent questions and I look forward to the Minister’s response to explain why it is that the Government puts layer after layer of consultation requirements on to local government, when essentially people are elected with the same motivation to do the right thing for their patch and to manage their affairs in the way that they are required to do. Yet we have loaded up an extraordinarily expensive process of consultation, consultation, consultation. I look forward to the Minister’s response.

The question was put that the amendments set out on Supplementary Order Paper 43 in the name of the Hon Mark Burton to Part 4 be agreed to.